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GOOD  WILL 
TRADE-MARKS 

AND 

UNFAIR  TRADING 


BY 

EDWARD  S.  ROGERS 

OF  THE  CHICAGO  BAR 

NON-RESIDENT  LECTURER  ON  THE  LAW  OF  TRADE-MARKS 
IN  THE  UNIVERSITY  OF  MICHIGAN 


A.  W.  SHAW  COMPANY 

CHICAGO  NEW    YORK 

LONDON 


r 

"R.6>3/4^ 


GOOD   WILL, 

TRADE -MARKS  AND  UNFAIR 
TRADING 


Copyright.  1914.  by 
A.  W.  Shaw  Company 


CONTENTS 


PART  I 


BUILDING  GOOD  WILL  FOR  A  BUSINESS 

CHAPTER  PAGE 

I    POLICIES  THAT  CREATE  GOOD  WILL         .          .          .          .  n 

Finding  out  what  good  will  is — Safeguarding  the  source 
of  profits — Habit  in  its  relation  to  good  will— What  holds 
the  friendliness  of  the  customer 

II    SETTING  A  VALUE  ON  GOOD  WILL  ....  22 

Professional  good  will — Business  good  will — The  element 
of  monopoly — Public  friendship  toward  monopoly — Patents 
and  copyrights — Things  to  omit  in  appraising  good  will — 
How  good  will  has  been  appraised — Making  a  fair  estimate 


PART  II 


III  TRADE-MARKS  AND  WHAT  THEY  STAND  FOR  ...  S3 

When  trade-marks  were  first  used— Penalties  for  infringe- 
ment four  centuries  ago — Trade  guilds  and  trade-marks 
— Trade-marks  and  heraldry — Modern  relief  from  infringe- 
ment— Increasing  litigation  in  modern  business 

IV  WHAT  RIGHT  A  TRADE-MARK  GIVES        ....  50 

How  trade-marks  differ  from  patents  and  copyrights — 
When  a  trade-mark  serves  its  purpose 

V    DEVISING  AN  EFFECTIVE  TRADE-MARK    ....  55 

Power  of  custom  in  determining  good  will — How  habit 
affects  price — When  a  trade-mark  establishes  a  habit  of 
buying  it  becomes  an  asset — How  not  to  devise  a  trade- 
mark— What  makes  a  trade-mark  valuable 


CONTENTS 

VI    A  STUDY  OF  THE  CONSUMER  .  «s 

Carelessness  is  characteristic  of  the  ordinary  purchaser — 
Often  the  dealer  does  not  know  who  makes  his  goods — 
Why  pictures  are  valuable  as  labels — What  makes  a  good 
trade  name — Value  lies  in  a  trade-mark  that  is  simple 
and  easy  to  remember 

VII    MAKING  A  TRADE-MARK  LEGALLY  SOUND        ...  74 

Don't  select  a  personal  name — Don't  select  a  geographical 
name — Don't  select  a  descriptive  name — Don't  select  a 
deceptive  name — Don't  select  an  infringing  name — Don't 
be  commonplace 

VIII    PROVING  TRADE-MARK  OWNERSHIP          ....  85 

Evidence  needed  in  proving  ownership — How  to  keep  a 
record  that  will  prove  the  right  to  a  trade-mark 

IX     HOW  UNTRUTHFULNESS  DESTROYS  TRADE-MARK  RIGHTS  90 

Who  made  the  product? — Where  was  the  product  made? 
— What  is  the  product  made  of? — What  is  the  product 
good  for? 

X  THE  TRANSFER  OF  TRADE-MARKS  AND  GOOD  WILL  .  09 

When  a  trade-mark  can  be  assigned — A  trade-mark  is  in- 
separable from  the  business  itself — How  the  law  applies 
to  licenses 

XI  REGISTRATION  OF  TRADE-MARKS 109 

National  registration — State  registration — Foreign  regis- 
tration 

XII    PUTTING  AN  ADVERTISING  POLICY  BEHIND  YOUR  MARK  m 

Placing  the  emphasis  in  advertising  on  the  thing  that 
identifies  the  goods — Advertising  expenditure  as  the  pur- 
chase price  of  good  will — Finding  your  point  of  contact 
with  the  consuming  public 


PART  III 

DEFENDING  A  BUSINESS  FROM  UNFAIR 
COMPETITION 

XJII    HOW  TO  DEAL  WITH  INFRINGERS 

Punishment  of  trade  pirates  in  the  Middle  Ages — How  the 
infringer  devised  new  ways  to  steal  trade — Infringement 
and  unfair  trading — The  law  of  unfair  competition — 
Proved  instances  of  actual  deception  help  to  establish  a 
case  at  law — Infringement  is  contagious — Deal  promptly 
with  infringers 


CONTENTS 

XIV  WHAT  CONSTITUTES  INFRINGEMENT       ....          IX 

Word  marks  that  infringed — Devices  that  infringed 

XV  DECEPTIVE  USE  OF  PLACE  NAMES  ....  148 

The  right  of  a  new  comer  in  good  faith,  to  a  geographical 
name- — A  non-resident's  right  to  a  geographical  name 
•verruled — Denial  of  right  .of  a  new  comer,  not  in  good 
faith,  to  a  geographical  name 

XVI    DECEPTIVE  USE  OF  PERSONAL  NAMES    .          .          .          .  1S8 

Deception  by  adoption  of  famous  name — Deception  by  use 
of  own  name  when  that  is  famous  one — The  courts  and 
deception  in  personal  names — The  restriction  of  use  of 
famous  names 

XVII    DECEPTIVE  USE  OF  DESCRIPTIONS  ....          IBS 

Development  of  the  law  covering  the  deceptive  use  of 
description — Enjoining  the  use  of  an  accurate  description 
to  prevent  fraud — When  descriptions  acquire  an  artificial 
significance 

{VIII    DECEPTIVE  IMITATION  OF  LABELS  AND  PACKAGES          .  184 

Analyzing  labels  and  packages  to  determine  deception — 
Evidence  of  trade  witnesses  often  unreliable — Deception 
as  a  question  of  practical  psychology 

XIX     INFRINGEMENT  BY  IMITATION  IN  FORM  AND  APPEARANCE     194 

Protecting  the  shape  and  appearance  of  the  container 
— Protecting  the  ornamentation  of  the  article — Protecting 
the  structure  of  the  article 

XX     EQUIVALENTS  THAT  DECEIVE  BUYERS  ...  80S 

Stealing  trade  by  contrivances  which  do  not  imitate  a 
mark  or  label 

XXI    REFILLED  PACKAGES,  SUBSTITUTION  AND  PASSING  OFF          212 

Rule  of  law  on  substitution  and  passing  off — Detecting 
false  representation  and  substitution — Evidence  must 
show  passing  off  to  be  intentional 

XXII    PROTECTING  GOOD  WILL  FROM  UNFAIR  ADVERTISING  218 

Protection  of  advertising  which  identifies  a  product — Un- 
fair advertising  is  usually  part  of  a  plan  of  infringement 
— Using  the  reputation  of  another  as  a  decoy 

XXIII  PROTECTING  BUSINESS  NAMES SK 

How  the  courts  have  dealt  with  the  business  parasite — 
Location  has  little  bearing  on  deception 

XXIV  RIGHTS  IN  NAMES  OF  PATENTED  AND  COPYRIGHTED 

ARTICLES  ....  .  2M 

When  copyright  expires — Protecting  the  good  will  of  a 
publisher — Protecting  the  author's  good  will — Trade- 
marks on  literary  merchandise 


CONTENTS 

XXV    THE  DECEPTIVE  USE  OF  COMMUNITY  MARKS          .          .          243 

Community  mark  principle — Establishing  the  right  to  a 
personal  mark — Stopping  the  fraudulent  use  of  a  descrip- 
tive term — The  rule  that  governs  unfair  trading 

XXVI     HOW  FAR  DO  TRADE-MARK  RIGHTS  EXTEND  t       .  254 

One  test  to  uncover  unfair  trading 

XXVII     HOW  PRICE  CUTTING  REACTS  ON  GOOD  WILL         .  .  257 

Effects  of  price  cutting  on  production — How  far  shall 
retail  prices  be  standardized  ? — Restrictions  that  did  not 
•tand  the  test  of  the  law — Price  cutting  analyzed — Speci- 
fic injuries  inflicted  on  good  will  by  price  cutting — The 
viewpoint  of  the  law 

XXVIII    THE  RACE  BETWEEN  THE  UNFAIR  TRADER  AND  THE  LAW        271 

The  passing  of  judicial  inertia — The  test  and  proof  of  un- 
fair trading — The  right  to  contract — The  right  to  be  free 
from  interference — What  the  public  demands  of  business 

BIBLIOGRAPHY 282 

INDEX        ...  285 


GOOD  WILL— A  NEW 
BUSINESS  PROBLEM 


EVERY  business  worth  imitating  has  the  problem  of 
mistaken  identity  to  deal  with.  The  enthusiasm  over 
a  successful  product,  package,  trade-mark,  method  or 
piece  of  copy  hatches  out  its  double  almost  overnight. 

In  the  last  thirty  years,  long  range  advertising  and 
national  distribution  have  become  dominating  mercantile 
facts.  Manufacturer  and  jobber  have  quite  generally 
adjusted  themselves  to  this  change.  The  retailer  is  now 
a  dispenser  of  many  standard  brands  to  a  neighbor- 
hood educated  in  trade-marks,  trade  names,  labels  and 
distinctive  packages.  Even  the  professional  man  no 
longer  has  a  local  but  a  sectional  or  national  clientele. 

Two  trade  provisions,  consequently,  are  becoming  every 
year  more  vital  to  the  going  concern;  means  of  identi- 
fication by  which  a  pleased  public,  once  won,  will  con- 
tinue to  distinguish  its  productions  anywhere;  and  a 
trained  "police  power"  to  restrain  or  destroy  the  in- 
fringements and  unfair  competition  which  naturally  at- 
tack any  successful  enterprise. 

Around  this  twentieth  century  need  of  every  progres- 
sive business  for  a  constructive  and  protective  policy  as 
regards  good  will,  this  volume  has  grown. 

It  is  not  a  law  book.  The  author  has  returned  to  it, 
chapter  by  chapter,  from  working  with  business  men 
and  concerns  in  their  efforts  to  defend  and  increase  their 
trade  good  will.  It  is  therefore  an  attempt  in  the  frank 


GOOD     WILL 

vernacular  of  American  business  and  in  the  most  practi- 
cal ways  to  help  minimize  infringement  (for  with  the 
originator's  due  care  of  good  will  and  trade-marks  in 
the  beginning,  most  cases  of  infringement  would  never 
have  gained  headway)  and  deal  with  unfair  traders  in 
or  out  of  court. 

Several  special  problems  of  good  will  which  are  just 
forcing  themselves  upon  the  attention  of  business  men 
are  also  dealt  with ;  advertising  and  sales  policies  which 
promise  good  will  or  threaten  ill  will;  how  the  value  of 
good  will  is  arrived  at;  standard  and  cut  prices  in  their 
relation  to  good  will;  how  any  proprietor  may  distin- 
guish his  business  in  an  effective  way,  and  control  new, 
ingenious  and  subtle  sorts  of  unfair  trading. 

Identified  as  it  is  with  books  of  practical  and  specific 
help  for  the  individual  business  head,  the  SYSTEM  trade- 
mark seems  to  have  a  peculiar  fitness  for  its  place  upon 
a  book  of  this  scope  and  authority,  in  a  field  at  once  so 
important  and  so  difficult. 

Acknowledgment  is  made  by  the  author  and  publishers 
to  Printers'  Ink,  to  which  a  portion  of  the  matter  con- 
tained in  the  following  pages  was  originally  contributed 
in  serial  form;  and  to  the  Michigan  Law  Review,  the 
Mahin  Data  Book  and  the  Harvard  Law  Review  for 
permission  to  republish  from  previous  contributions  by 
the  author  to  these  publications.  On  collecting  this  mat- 
ter into  book  form,  however,  the  author  has  not  only 
subjected  it  to  thorough  revision,  rearrangement  and 
elaboration,  but  has  pursued  the  discussion  of  good  will, 
business  identification  and  unfair  competition  further  in 
several  important  phases.  The  present  volume  therefore 
embodies  much  new  matter,  now  published  for  the  first 
time. 

THE  PUBLISHERS 


PART  I 

BUILDING    GOOD  WILL 
FOR    A    BUSINESS 


CHAPTER  I 

POLICIES  THAT  CREATE 
GOOD  WILL 


IN  1878  a  manufacturer  of  toilet  soaps  decided  that 
he  was  using  too  many  different  fancy  names  for 
his  goods.  He  had  made  up  his  mind  to  do  some  adver- 
tising and  like  a  sensible  man  he  wanted  to  concentrate 
on  one  or  two  brands,  and  not  scatter  his  appropriation 
over  a  score.  "We'll  weed  out  some  of  these  dead  ones," 
he  said ;  "  'Pink  Petunia,'  'Odors  of  Araby,'  and  a  lot 
like  that  we're  better  off  without.  They  never  were  sel- 
lers— we've  never  been  able  to  persuade  anybody  to  buy 
them  yet.  Let's  get  rid  of  them  and  push  something  that 
sells."  So  the  labels  went  under  the  boiler.  The  names 
were  taken  out  of  price  lists,  and  forgotten.  "Pink 
Petunia"  toilet  soap  was  as  completely  extinguished  as 
if  it  had  never  existed.  That  was  in  187& 

There  still  is  one  old  lady  in  a  small  New  England 
town  who,  ever  since  1878,  several  times  a  year  sends  in 
an  order  for  "Pink  Petunia"  soap.  She  says  that  the 
druggist  in  her  town  does  not  keep  it,  though  it  is  the 
best  soap  she  ever  used.  It  was  somewhat  inconvenient 
for  the  manufacturer  to  keep  Pink  Petunia  alive  for  one 
customer.  So  years  ago  she  was  written  to  and  asked 
if  something  else  would  not  do  as  well.  No,  she  said,  she 
liked  Pink  Petunia — she  had  always  used  it — her  mother 
before  her  had  used  it.  It  was  good  soap.  Nothing  else 
would  do.  She  seemed  a  little  hurt. 

This  single  customer  of  Pink  Petunia  has  become  an 
institution  in  that  business.  Everyone  feels  that  she  is 

11 


BUILDING     GOOD      WILL 

a  member  of  the  family.  Once  in  a  while  someone  in 
the  office  says:  "Isn't  it  about  time  we  heard  from  Mrs. 
Nickerson?  I  wonder  if  she's  all  right?" 

Pink  Petunia  has  been  kept  alive  for  Mrs.  Nickerson, 
and  labels  printed  for  her  alone  since  1878.  No  one  has 
had  the  heart  to  tell  her  that  for  nearly  forty  years 
she  has  been  the  only  person  in  the  whole  country  who 
has  bought  that  soap. 

Mrs.  Nickerson's  loyalty  to  Pink  Petunia  is  somewhat 
humorous.  Her  friendliness  is  a  little  pathetic.  But 
multiply  Mrs.  Nickerson  by  a  million  and  the  aggregate 
loyalty  and  friendliness  is  anything  but  humorous  or 
pathetic.  It  becomes  an  asset  worth  much  real  money. 

"George,"  said  his  mother  to  her  small  boy,  "here's  a 
penny.  Run  down  to  the  grocery  and  get  me  a  cake  of 
yeast."  After  the  digressions  and  diversions  character- 
istic of  small  boys  and  just  within  the  limit  of  tolerance, 
George  returns  with  the  yeast.  "Where  have  you  been?" 
says  his  mother  with  the  accent  on  the  have.  "You've 
been  gone  twice  as  long  as  you  should  have."  "I  went 
to  that  new  shiny  grocery  on  Main  Street,"  says  the 
boy.  "What  possessed  you  to  go  there?  Don't  you  ever 
do  such  a  thing  again.  You  know  we  always  trade  at 
Johnson's." 

Mr.  Johnson's  continuance  in  business  depends  on 
George's  mother,  and  others  like  her  who  "always  trade" 
with  him. 

The  soap  manufacturer's  continuance  in  business  de- 
pends upon  the  multitudinous  Mrs.  Nickersons,  who  like 
his  soap  and  buy  it  in  preference  to  the  soap  of  other 
makers. 

This  collective  friendliness  is  good  will. 

Most  people  approach  good  will  from  the  wrong  end. 
It  is  commonly  thought  of  as  a  thing  to  put  into  ap- 
praisals and  bills  of  sale  as  an  excuse  for  an  issue  of 
watered  stock — a  catch-all  to  pad  a  schedule  of  assets. 
As  a  matter  of  fact,  however,  it  is  a  thing  which  con- 
cerns almost  everyone.  We  are  all  of  us,  as  individuals, 
constituents  which  go  to  make  up  the  good  will  of  those 

12 


CONSTRUCTIVE     POLICIES 

with  whom  we  trade.  If  we  are  manufacturing  or  job- 
bing or  shopkeeping  for  ourselves,  we  have  an  opportun- 
ity of  building  a  good  will  of  our  own.  If  we  are  em- 
ployees we  are  instruments  in  the  creation  of  good  will 
for  our  employers. 

As  with  all  intangible  things,  good  will  is  hard  to  place 
mentally.  Like  reputation,  popularity  and  friendliness, 
it  is  so  elusive  that  there  is  little  wonder  its  value  and 
its  very  existence  are  so  frequently  ignored.  Like  char- 
acter and  reputation  in  an  individual — the  things  which 
enable  anyone  to  associate  with  his  fellows — good  will  is 
what  perpetuates  a  business. 

FINDING  OUT  WHAT  GOOD  WILL  IS 

Good  will  is  that  which  makes  tomorrow's  business 
more  than  an  accident.  It  is  the  reasonable  expectation 
of  future  patronage  based  on  past  satisfactory  dealings. 
Promiscuous  and  casual  customers  or  clients  do  not  pay 
the  profits.  Those  who  come  regularly  do.  These  per- 
sons have  found  the  dealer  trustworthy,  his  goods  of  high 
quality,  his  skill  and  knowledge  commendable.  They  have 
been  satisfied  with  the  treatment  they  have  received  in 
the  past  and  are  reluctant  in  the  absence  of  some  reliable 
recommendation  or  special  circumstance,  to  risk  trans- 
ferring their  custom  to  another.  It  is  this  hope  and 
probability  that  keeps  a  business  going  and  gives  it  a 
selling  value  above  that  of  its  leasehold,  equipment  and 
stock. 

"The  only  proper  signification  of  the  word  good  will," 
says  Professor  Parsons,  "must  be  that  benefit  or  advan- 
tage which  rests  only  on  the  good  will  or  kind  and  friend- 
ly feeling  of  others.  It  is,  after  all,  nothing  more  than 
a  hope  grounded  upon  a  probability." 

Many  concerns  have  built  up  an  asset  of  good  will  in 
a  remarkably  short  time  by  definite  methods  of  friendli- 
ness and  tact,  just  as  some  salesmen  have  made  them- 
selves solidly  popular  in  a  short  time  by  a  card  follow- 
up  which  enabled  them  to  fit  in  with  their  prospects' 

IS 


BUILDING     GOOD     WILL 

nobbies  and  to  avoid  controversial  subjects.  It  is  sug- 
gestive, if  nothing  more,  for  the  heads  of  a  business  to 
consider  (1)  the  classes  whose  good  will  of  one  sort  or  an- 
other is  important;  (2)  the  chief  points  of  contact  with 
each  of  these  groups. 

Among  the  good  will  points  of  contact — the  expe- 
riences from  which  those  who  view  a  concern  externally 
draw  their  ideas  of  a  business,  the  most  important  prob- 
ably are: 

1.  Advertising. 

2.  Personal  contact. 

3.  Service  and  deliveries. 

4.  The  product  in  use. 

When  an  ordinary  person  decides  to  make  a  purchase 
or  a  dealer  plans  to  lay  in  stock,  in  almost  every  in- 
stance he  must  make  a  choice  among  several  articles, 
individuals  or  establishments.  Usually  he  has  some  past 
experience  as  a  background.  Of  two  haberdashers  with 
whom  he  has  traded  before,  a  man  returns  to  the  store 
of  which  he  has  the  pleasantest  recollections.  He  is  not 
inclined  to  experiment  with  a  third  without  reason.  He 
recalls  perhaps  that  at  one  store,  when  he  asked  for  a 
"union  suit  at  about  a  dollar  and  a  half,"  the  salesman 
intimated  by  his  manner  that  people  of  respectability 
never  pay  less  than  three  dollars  for  such  a  garment. 
That  or  some  like  experience  has  left  an  unpleasant  im- 
pression, so  he  goes  to  the  other  store.  Here  he  is  greeted 
by  name  and  shown  exactly  what  he  asks  for,  which  in- 
volves the  implied  compliment  that  he  knows  what  he 
wants. 

It  may  be  the  height  of  salesmanship  to  sell  a  man 
who  wants  a  dollar  and  a  half  union  suit,  one  costing  him 
three  dollars.  If  in  so  doing,  however,  the  customer  is 
made  uncomfortable,  he  gets  even  in  the  only  way  open 
to  him — he  does  not  come  again.  The  store  has  lost  his 
good  will. 

A  big  suit  store  has  recently  faced  the  same  danger. 
The  store  was  a  plain,  unpretentious  looking  place,  where 
a  man  with  only  fifteen  dollars  to  spend  for  a  suit  felt 

14 


CONSTRUCTIVE     POLICIES 

as  good  as  the  firm.  He  was  a  patron — not  a  petitioner. 
He  bought — and  what  is  more,  he  came  again.  Conse- 
quently the  store  built  up  a  large  twelve-to-fifteen-dollar 
suit  trade.  The  profits  from  this  great  middle  class  and 
its  good  will  finally  enabled  the  proprietor  to  put  up  a 
new  building.  He  built  in  the  immediate  neighborhood 
but  of  granite,  with  plate  glass  and  gilt  chandeliers,  car- 
peted floors  and  mahogany  fixtures.  But  the  twelve-to- 
fifteen-dollar  trade  has  not  followed  to  the  new  store. 
The  man  with  twelve  dollars  to  invest  in  a  new  suit  does 
not  feel  at  home  in  such  a  place.  From  the  looks  of  it, 
he  judges  that  he  will  be  expected  to  spend  more.  The 
sales  record  of  the  new  shop  was  not  long  in  showing 
the  absence  of  one  great  sustaining  class  of  its  trade. 
The  new  store  has  unwittingly  made  itself  unpleasant  for 
the  twelve-dollar  man  and  has  lost  his  good  will. 

SAFEGUARDING  THE  SOURCE  OF  PROFITS 

Another  merchant  saw  this  danger  to  good  will  in  time. 
When  he  got  ready  to  put  up  a  new  building,  his  architect 
suggested  something  with  marble  columns  and  elaborate 
fittings.  "No,"  said  the  merchant,  "I  have  made  my 
money  selling  plain  things  to  plain  people — I  do  not  want 
to  scare  them  away."  The  new  store  he  erected  was  plain, 
practical,  convenient;  and  it  retained  the  good  will  of 
its  trade. 

The  expression  occasionally  heard,  "they  are  nice  peo- 
ple to  do  business  with,"  is  more  than  an  empty  compli- 
ment. It  is  the  index  of  a  valuable  asset,  and  just  as 
such  an  expression  spreads  good  will,  ill  will  also  multi- 
plies through  unfriendly  word  of  mouth.  Smoking  car 
gossip  sends  many  a  guest  to  a  particular  hotel  and 
keeps  many  away  from  their  intended  patronage. 

One  day  an  important  client  burst  into  the  private 
room  of  a  member  of  a  big  New  York  law  firm.  "Look 
here,  Sam,"  he  said,  "if  I  hadn't  been  a  client  of  yours 
for  ten  years,  and  if  you  didn't  know  my  affairs  better 
than  I  do  myself,  I'd  never  come  into  your  office  again." 

15 


BUILDING     GOOD      WILL 

"Sit  down  and  cool  off,"  was  the  answer.  "What's 
happened  ?" 

"No,  I  won't  sit  down  and  cool  off;  I'm  sore,"  rejoined 
the  client.  "If  I  were  running  this  office,  the  first  thing 
I'd  do  would  be  to  fire  that  graven  image  you've  got  for 
a  door  man.  Here  I've  been  coming  to  see  you  every  few 
weeks  for  years  and  he  never  knows  me — asks  me  my 
name  and  who  I  want  to  see  and  what  my  business  is. 
He  did  it  just  now.  If  I'm  not  of  sufficient  importance 
to  be  recognized  by  your  employees,  I'm  going  somewhere 
else." 

To  remember  names  and  call  people  by  their  own  is  as 
subtle  a  compliment  as  one  can  pay  another.  People 
who  are  not  fugitives  from  justice  like  to  go  where  they 
are  known  and  recognized.  They  like  to  have  their  tastes 
and  peculiarities  remembered  by  those  with  whom  they 
come  in  contact.  This  point  of  contact,  wherever  it  may 
occur,  is  where  good  or  ill  will  is  chiefly  made.  It  may 
be  in  correspondence — many  a  customer  has  been  lost 
by  a  complaint  letter  which  in  attempting  to  be  firm, 
was  only  unreasonable,  or  in  attempting  to  be  vigorous 
was  merely  offensive. 

The  public  is  unlikely  to  distinguish  between  the  pro- 
fessional and  the  personal  acts  of  a  proprietor  and  is 
almost  sure  to  judge  all  parts  of  a  business  by  the  one 
service  or  blunder  through  which  they  first  became  ac- 
quainted with  a  house. 

Good  will  conservation  through  correct  and  diplomatic 
house  policies  is  a  problem  as  big  as  the  business  itself, 
but  it  can  be  definitely  approached  by  listing  the  classes 
whose  good  will  is  important  and  then  examining  its  pol- 
icy at  every  point  of  contact  with  any  of  these  classes. 

Only  of  late  years  have  business  men  generally  begun 
to  appreciate  the  value  of  correct  policy  in  these  things 
that  often,  cost  nothing  and  yet  create  good  will. 

Historically,  locality  seems  to  have  been  the  prime  con- 
sideration in  conceiving,  defining  and  transferring  good 
will.  It  used  to  be  the  almost  universal  provision  in  a 
contract  for  the  sale  of  a  business,  for  the  seller  to  agree 

16 


CONSTRUCTIVE     POLICIES 

not  to  engage  in  the  same  business  for  a  time  within  a 
certain  distance  of  the  old  location.  Most  of  our  inher- 
ited notions  concerning  restraint  of  trade  are  derived 
from  judicial  opinions  construing  such  contracts.  If  the 
buyer  required  the  seller  to  restrain  himself  from  com- 
peting further  than  was  necessary  to  protect  him  in  the 
enjoyment  of  the  business  purchased,  the  restraint  was 
held  unreasonable  and  the  contract  void. 

HABIT  IN  ITS  RELATION  TO  GOOD  WILL 

That  locality  should  have  been  regarded  as  so  impor- 
tant a  consideration  in  earlier  discussions  of  good  will  is 
natural  enough  when  it  is  remembered  that  the  wide  dis- 
tribution of  manufactured  goods  in  the  modern  sense  is 
a  matter  only  of  the  last  sixty  or  seventy  years. 

Business  used  to  be  done  face  to  face.  People  went 
to  the  local  cobbler  for  their  shoes,  to  the  local  miller 
for  their  flour,  to  the  village  tailor  for  their  clothes. 
These  things  were  not  to  be  had  elsewhere.  They  acquired 
the  habit  of  going  to  certain  places  to  buy  certain  things. 
If  there  were  two  men  in  the  same  business,  they  traded 
with  the  one  whose  past  services  gave  them  the  best  as- 
surance of  satisfactory  future  dealings.  The  present  sit- 
uation is  exactly  the  reverse.  We  may  want  a  specific 
thing,  but  thanks  to  modern  methods  of  distribution,  it 
may  be  had  almost  anywhere. 

In  the  case  of  a  business  where  dealing  is  face  to  face, 
location  is  important  on  account  of  the  locality  habit. 
People  get  used  to  turning  certain  corners,  entering  cer- 
tain doorways;  and  constant  repetition  forms  a  habit. 
But  with  an  article  of  merchandise  of  wide  distribution, 
the  locality  habit  is  of  no  value.  There  is  no  need  of 
going  to  a  particular  place  to  buy  Quaker  Oats  or  Win- 
chester rifles.  They  can  be  bought  anywhere.  It  is  not 
a  locality  habit  or  a  friendliness  toward  the  immediate 
seller  that  counts  so  much  as  a  friendliness  toward  the 
maker  of  the  desired  goods,  or,  more  likely  still,  towards 
the  goods  themselves. 

17 


BUILDING     GOOD     WILL 

The  average  person  is  not  a  judge  of  values.  You 
and  I  probably  cannot  by  looking  at  it  tell  good  sugar 
from  bad.  The  dealer  from  whom  we  buy  may  not  be 
a  better  judge  than  we  are.  Therefore  the  tendency 
more  and  more  is  to  subordinate  bulk  goods  and  the 
retail  purchaser's  and  distributor's  comparative  uncer- 
tainty as  to  quality,  to  package  goods  and  the  producer's 
certain  guaranty  of  quality.  The  good  will  incident  to 
particular  premises  is  becoming  relatively  of  less  conse- 
quence. Its  importance  has  been  transferred  to  the  good 
will  which  is  not  limited  in  space  or  dependent  on  location 
but  attaches  to  the  goods  themselves,  however  far  they 
may  travel  from  their  point  of  origin.  The  responsibility 
for  quality  is  carried  back  through  the  channels  of  dis- 
tribution to  the  producer. 

Just  as  a  woman  continues  to  deal  with  her  grocer  be- 
cause her  past  experience  guarantees  her  future  satisfac- 
tion, the  customer  goes  on  buying  Quaker  Oats,  Heinz* 
pickles,  or  Elgin  watches  for  precisely  the  same  reason. 
The  name  is  not  a  matter  of  sound  or  personality  or  lo- 
cality, but  of  satisfactory  goods. 

The  accident  of  locality  or  satisfactory  intercourse  is 
not  the  seat  or  cause  of  a  good  will  towards  a  product. 
To  what  then  does  good  will  attach — it  being  the  reason- 
able expectation  of  continued  dealings?  What  is  it  that 
tells  the  purchaser  that  what  he  is  buying  today  is  the 
identical  thing  he  bought  a  week  ago,  found  good  and 
now  wants  to  buy  again? 

If  all  flour  were  put  out  in  plain,  unbranded  bags,  who 
could  tell  that  this  week's  supply  was  made  by  the  same 
mill  making  the  flour  bought  last  week?  If  all  cigars 
were  packed  in  boxes  without  labels,  there  would  be  noth- 
ing but  the  word  of  the  dealer  that  today's  panatela  came 
from  the  same  box  as  the  good  ones  bought  yesterday 
and  desired  again  today,  or  the  suffocators  bought  yes- 
terday and  to  be  avoided  ever  after.  People  who  have 
no  conception  of  or  interest  in  the  personality  or  even 
in  the  existence  of  the  maker  of  particular  goods,  may 
desire  them  in  preference  to  others  because  they  have 

18 


CONSTRUCTIVE     POLICIES 

been  tried  and  approved. 

For  example,  I  lose  my  fountain  pen  and  want  another 
like  it.  I  have  found  it  satisfactory  and  have  no  desire 
to  experiment  with  other  makes.  So  I  go  to  a  stationer's 
and  ask  for  another  "so-and-so"  pen.  If  I  had  lived  a 
hundred  years  ago  and  lost  my  favorite  quill  I  should 
have  gone  to  the  place  where  I  had  bought  it  and  de- 
scribed to  the  shopkeeper  as  best  I  could  the  sort  of  pen 
I  wanted.  I  should  have  been  careful  to  go  to  the  same 
stationer,  because  this  would  be  an  important  element  in 
securing  a  new  pen  like  the  old  one.  Today  I  pay  no 
attention  to  the  name  of  the  shop.  I  go  to  any  stationer 
and  ask  for  my  favorite  brand.  I  may  have  no  idea  who 
the  manufacturer  of  it  is  or  where  it  is  made.  I  do  not 
care.  But  I  know  that  to  get  the  same  sort  of  satis- 
factory pen  I  had  before  I  must  ask  for  that  brand. 

FINDING  THE  TRADE  NAME  THAT  FIXES  GOOD  WILL 

The  name  is  the  means  by  which  I  am  able  unmistak- 
ably to  fix  the  good  will  which  I  have  toward  this  par- 
ticular article  of  merchandise.  It  is  not  dependent  upon 
a  place,  it  designates  a  thing;  and  without  this  desig- 
nation, the  good  will  created  by  the  satisfactory  behavior 
of  my  old  pen  would  be  of  no  use  to  me  or  to  the  manu- 
facturer. I  have  the  hope  and  belief,  based  on  the  good 
service  one  such  pen  has  given  me,  that  another  bearing 
the  same  name  will  be  equally  good.  This  is,  then,  an 
opportunity  to  connect  good  will  with  goods  after  they 
have  left  the  hands  of  the  producer  and  passed  into  the 
channels  of  trade.  And  there  is  no  possibility  of  creat- 
ing or  perpetuating  a  good  will  without  some  identifying 
means. 

The  purchaser  must  be  given  a  chance  to  choose.  Other- 
wise, his  friendliness  toward  a  particular  producer's  com- 
modity cannot  manifest  itself.  It  is  of  no  consequence 
whether  the  identifying  means  is  a  name,  a  trade-mark, 
a  label,  a  dress  of  package,  or  any  other  of  the  number- 
less things  which  enables  a  purchaser  to  pick  out  the  mer- 

19 


BUILDING     GOOD      WILL 

chandise  he  wants.  This  identifying  means  enables  the 
producer  of  the  preferred  goods  to  benefit  by  the  pref- 
erence and  perpetuate  his  business;  it  enables  purchasers 
to  be  sure  that  succeeding  purchases  are  of  the  same  make 
as  the  first. 

Producers  would  have  no  incentive  to  make  a  good 
article  if  buyers  could  not  definitely  ascertain  its  source. 
Inferiority  could  effectually  hide  itself  in  anonymity.  If 
the  bad  could  not  be  discriminated  from  the  good,  all 
would  be  bad.  A  trade-mark  or  other  identifying  means 
applied  to  merchandise  is,  therefore,  the  thing  which  dis- 
tinguishes the  object  of  good  will  to  people  who  may 
know  nothing  about  the  maker. 

Means  of  identification  are  not  valuable  for  what  they 
are  but  for  what  they  stand  for.  The  word  "Ivory"  was 
only  one  of  millions  of  names  which  could  have  been 
selected  as  a  trade-mark  for  soap,  and  any  pleasant, 
convenient  word,  if  used  as  "Ivory"  has  been  used,  would 
have  practically  the  value  which  "Ivory"  now  has. 
There  is  no  magic  in  the  name.  The  magic  is  in  the 
good  will  which  the  name  symbolizes.  People  now  ask 
for  "Ivory"  soap,  not  because  the  word  Ivory  has  an  at- 
tractive sound,  but  because  the  soap  which  they  have 
previously  bought  under  that  name  pleased  them.  The 
word  "Ivory"  is  the  means  by  which  they  are  able  to 
manifest  their  good  will  toward  the  desired  product. 

The  probability  that  this  friendliness,  based  upon  the 
belief  in  the  excellence  of  "Ivory"  soap,  will  continue,  and 
successive  purchases  result,  is  a  property  right  of  im- 
mense value.  It  was  originally  created  and  has  been 
maintained  by  methods  precisely  analogous  to  those  which 
encourage  the  retail  grocer  to  hope  that  his  customers 
of  today  will  trade  with  him  tomorrow,  next  week  and 
next  year. 

It  is  as  fatally  easy  to  imperil  the  good  will  attached 
to  a  trade-marked  commodity  as  it  is  for  a  storekeeper 
to  drive  away  the  people  who  patronize  him.  An  unat- 
tractive store  drives  customers  away.  Unattractive 
packages,  offensive  advertising  and  any  failure  to  appre- 

20 


CONSTRUCTIVE     POLICIES 

date  that  first  impressions  of  goods,  as  of  people,  depend 
largely  on  externals,  drive  potential  buyers  to  other 
goods,  and  sacrifice  good  will. 

WHAT  HOLDS  THE  FRIENDLINESS  OF  THE  CUSTOMER! 

The  only  real  difference  between  the  good  will  of  a 
store,  office,  hotel  or  theater,  and  the  good  will  of  the 
manufacturer  or  jobber  with  wide  distribution,  lies  in 
the  means  which  people  have  of  distinguishing  the  place 
where  or  the  article  which  they  wish  to  buy.  With  the 
former,  location  is  one  of  these  identifying  means;  and 
the  sign  over  the  door,  the  appearance  and  popular  name 
of  the  place  are  others.  When  the  thing  is  an  article  of 
merchandise  passing  through  the  channels  of  trade  to 
the  consumer,  the  good  will  must  and  does  attach  to  the 
trade-mark  or  whatever  identifies  the  article  in  the  public 
mind. 

The  cultivation  and  conservation  of  good  will  as  an 
asset  requires  the  adoption  and  use  of  means  by  which  it 
may  be  fixed  in  the  minds  of  purchasers.  This  means 
once  established  must  be  protected  from  policies  originat- 
ing within  by  which  its  virtue  as  an  identification  and  a 
symbol  of  good  will  may  be  impaired,  and  from  assaults 
from  without  by  which  its  value  is  sought  unfairly  to  be 
appropriated  by  others.  These  considerations  underlie 
and  explain  the  necessity  for  trade-marks  and  their  pro- 
tection. Only  second  in  importance  to  the  building  of 
good  will  is  the  establishing  of  the  marks  by  which  it  is 
fixed  and  visualized,  and  their  defence  and  protection 
from  the  assaults  of  the  infringer  and  unfair  trader. 


21 


CHAPTER  II 

SETTING  A  VALUE  ON 
GOOD  WILL 


GOOD  WILL  or  friendliness  must  be  directed  toward 
some  identified  individual  or  establishment.  The 
recipient  must  be  capable  of  being  distinguished  from 
others  before  there  can  be  any  benefit  to  him  from  the 
preference.  These  things  have  already  been  touched  on. 

Most  men  do  not  have  occasion  to  appraise  the  good 
will  of  their  enterprises  until  the  question  of  sale  arises. 
With  almost  every  business  that  is  salable,  there  are 
things  of  value  beyond  the  tangible  property,  that  pass 
and  must  have  a  value  put  upon  them.  Under  the  defi- 
nition that  the  good  will  of  a  business  is  only  the  expec- 
tation of  continued  patronage  due  to  the  friendliness  of 
the  public  based  on  past  satisfactory  experience,  there 
are  manifestly  certain  trade  expectations  which  are  not 
salable  and  others  not  due  to  public  friendliness. 

No  one  doubts  that  a  lawyer  or  doctor  who  has  been 
long  established  in  a  particular  place  may  have  a  real  good 
will.  People  are  influenced  by  more  than  the  mere  learn- 
ing, and  skill  of  the  practitioner.  Personality  counts 
for  such,  perhaps  location  also  is  an  element.  But  these 
things,  to  the  extent  that  they  are  essentially  individual, 
are  not  salable.  A  man  can  hardly  divest  himself  of  his 
personality.  There  are  cases  which  hold  that  good  will 
depending  upon  personal  effort  or  individual  service  can- 
not be  transferred  so  as  to  clothe  another  with  its  advan- 
tages— that  such  good  will  cannot  be  sold.  It  was  seen, 
however,  at  an  early  date,  that  to  adopt  any  such  rule 

22 


ELEMENTS    A;ND     APPRAISAL 

without  exception  would  work  hardship  because  there 
are  advantages  due  to  long  and  efficient  service  which 
are  distinctly  valuable  and  not  so  intimately  personal  as 
to  be  incapable  of  assignment.  To  forbid  any  transfer 
whatever  would  deprive  the  creator  of  these  advantages 
of  one  incident  of  property — the  right  of  disposition. 

In  England,  where  sales  of  professional  practices  are 
much  commoner  than  in  this  country,  and  also  in  the 
United  States,  the  courts  have  sustained  sales  of  such  a 
business  and  good  will  coupled  with  agreements  on  the 
part  of  the  seller,  limited  in  time  and  space,  to  keep  out 
of  practice;  but  have  held  that  all  the  sale  of  the  good 
will  of  a  practice  amounts  to  is  to  obligate  the  seller  to 
introduce  the  buyer  to  his  clients  or  patients  and  recom- 
mend him  to  them.  The  value  of  this  recommendation  is 
the  value  of  such  a  good  will  and  is  obviously  difficult  if 
not  impossible  to  estimate. 

But  the  good  will  most  frequently  the  subject  of  trans- 
fer is  the  sort  connected  with  a  place  of  business  or  a 
commodity.  Now  good  will  is  incidental  to  a  business 
and  does  not  exist  independently  of  it;  it  cannot  be  the 
subject  of  separate  sale.  Good  will  passes  with  a  trans- 
fer of  a  business  or  its  assets,  whether  it  is  specifically 
mentioned  in  the  conveyance  or  not.  It  goes  with  the 
thing  to  which  it  is  appurtenant.  Good  will  is  inseparable 
from  the  business.  It  could  not  well  be  otherwise.  The 
good  will  of  a  business  is  the  public's  friendliness  toward 
it.  To  transfer  the  friendliness  without  at  the  same  time 
transferring  the  object  of  it,  would  be  impossible. 

There  are  some  establishments  where  the  future  public 
patronage  is  not  wholly  dependent  on  choice.  The  rail- 
way lunch  counter,  the  exclusive  cab  or  baggage  trans- 
fer line,  the  gas,  electric  or  telephone  company  and  the 
street  car  companies  expect  continued  patronage,  but  this 
anticipation  arises  chiefly  out  of  the  public's  necessity, 
not  from  their  preference.  It  is  scarcely  an  advantage 
obtained  through  long  continued  business  or  good  service. 
The  enforced  absence  of  competition  is,  of  course,  a  val- 
uable thing,  and  is  frequently  called  and  appraised  as 

23 


BUILDING     GOOD      WILL 

good  will;  but  it  is  not  good  will,  properly  speaking.  It 
is  not  a  voluntary  preference  of  one  trader  over  another, 
which  presupposes  competition  actual  or  in  the  future. 

True  good  will  results  in  the  choice  of  one  article  or 
business  over  another,  induced  by  good  reputation  or  past 
experience  with  one  of  them.  Not  only  must  there  be 
this  reason  for  a  choice,  but  selection  is  not  possible 
unless  there  is  also  an  alternative  short  of  going  without. 

The  buyer's  friendliness  toward  one  party  can  be  a 
subject  of  even  approximately  exact  valuation  only  when 
it  includes  him  and  by  the  same  operation  excludes  an- 
other possible  recipient  of  it.  Otherwise  it  is  like  elec- 
tion with  only  one  candidate ;  he  wins  whether  he  deserves 
to  or  not  and  the  fact  of  his  winning  is  no  certain  indi- 
cation of  his  popularity  or  future  success. 

The  concern  with  trade  expectations  that  depend  on 
a  monopoly  is,  however,  coming  to  recognize  (even  if  it 
cannot  value  it  in  dollars  and  cents)  the  importance  of 
true  good  will.  Its  public,  if  untactfully  treated,  will 
go  without,  will  accept  a  makeshift,  will  make  selling 
more  difficult,  franchises  precarious,  regulation  oppres- 
sive. To  cultivate  a  genuine  good  will  asset — to  demand 
respect  for  all  the  observances  which  build  up  true  friend- 
liness— has  a  place,  therefore,  in  the  enlightened  policy 
even  of  a  business  that  excludes  competition.  Such  a 
good  will,  though  indirectly  of  great  consequence  in  en- 
hancing the  worth  of  the  property  toward  which  it  is 
directed,  still  is  so  subordinated  to  the  monopoly  element 
inherent  in  an  exclusive  business  that  it  can  hardly  be 
called  good  will  in  the  sense  of  that  phrase  as  used 
throughout  this  discussion.  In  cases  where  two  or  more 
public  service  companies  serve  the  same  community,  so 
that  there  is  opportunity  for  the  public  to  favor  one  and 
discriminate  against  another,  true  good  will  may  well  be 
an  inducement  to  purchase;  otherwise,  any  additional 
patronage  due  to  public  friendliness  can  hardly  be  segre- 
gated from  patronage  enforced  by  public  necessity. 

Patents  and  copyrights  are  of  course  taken  into  ac- 
count in  any  appraisal.  They  are  sometimes  included  in 

24 


ELEMENTS    AND     APPRAISAL 

good  will,  but  should  not  be.  They  are  limited  statutory 
monopolies  and  their  value  is  based  on  entirely  different 
considerations  from  the  subject  here  under  discussion. 
Good  will  is  founded  not  on  monopoly  but  on  absence  of 
monopoly.  Patents  and  copyrights  are  profitable  because 
they  carry  the  right  to  exclude.  If  the  public  want  the 
patented  thing,  they  must  come  to  the  patentee  for  it. 
Good  will,  on  the  other  hand,  is  what  induces  the  pur- 
chaser to  buy  a  particular  maker's  commodity  in  prefer- 
ence to  an  article  of  the  same  kind  made  by  some  one  else. 
It  is  choice,  not  compulsion.  Patents  and  copyrights 
exclude  competition;  good  will  implies  at  least  potential 
competition, 

A  person  manufacturing  a  product  under  a  patent 
monopoly  can  acquire  a  good  will.  This  comes  to  him 
by  the  excellence  of  his  work  or  the  development  of  his 
business.  It  exists  independently  of  the  patent.  It  is 
not  a  thing  which  is  created  or  made  more  valuable 
by  the  patent  monopoly.  This  will  be  clear  if  for  a 
moment  we  consider  the  patent  monopoly  apart  from 
the  business.  As  a  monopoly  it  has  precisely  the  same 
value  whether  it  is  exercised  or  not.  It  represents  the 
same  possibility  of  future  trade,  not,  however,  based 
on  past  service.  When  the  patented  article  is  upon  the 
market,  the  maker  may  acquire  a  reputation  as  a  manu- 
facturer or  merchant,  but  this  in  no  way  enhances  or 
diminishes  the  value  of  the  right  the  patent  confers — the 
right  to  exclude  others  from  the  practice  of  the  invention. 

This  separation  of  enforced  from  voluntary  patronage 
suggests  a  method  of  clearing  up  some  of  the  confusion 
that  exists  in  the  appraisal  of  good  will.  It  is  desirable 
to  split  away  and  value  separately  the  monopoly  factors 
of  trade  expectancy  or  the  continued  custom  of  those  who 
return  because  they  must,  and  leave  as  the  basis  of  real 
good  will  the  probability  of  continued  patronage  by  those 
who  return  because  they  choose. 

In  estimating  the  value  of  earnings  due  to  true  good 
will,  we  may,  therefore,  exclude  (1)  a  fair  return  on  the 
value  of  all  tangible  property,  (2)  profits  resulting  from 

25 


BUILDING     GOOD      WILL 

all  exclusive  franchises,  and  (3)  from  all  patents  and 
copyrights,  and  (4)  from  everything  which  places  the 
probability  of  future  patronage  on  any  basis  but  the  free 
choice  or  habit  of  the  public.  There  remain  then  earn- 
ings which  must  have  resulted  from  the  choice  or  habit 
of  purchasers,  and  it  is  reasonable  to  hope  that  under 
like  conditions  these  profits  will  continue.  From  this 
probability  of  future  trade  due  to  past  publicity,  service 
and  satisfaction,  it  is  possible  to  estimate  (1)  the  pro- 
spective rate  of  profit,  (2)  the  probable  endurance  of 
this  friendliness  and  hence  (3)  its  capital  value. 

Necessarily,  however,  even  with  the  closest  study  of 
the  history  of  a  business  to  be  bought  or  sold,  the  value 
of  the  good  will  must  be  to  a  considerable  extent  con- 
jectural, because  of  the  questions  that  arise  regarding 
its  transference  and  its  sensitiveness  to  every  house  policy 
and  every  attack  upon  it  from  without. 

That  this  indefiniteness  is  widely  felt  may  be  judged 
from  the  fact  that  there  seems  to  be  no  uniform  practice 
in  valuing  good  will.  To  ask  a  manufacturer  to  put  a 
price  on  his  good  will  is  like  asking  an  individual  how 
much  in  dollars  and  cents  his  reputation  is  worth.  Re- 
cently an  inquiry  was  directed  to  a  number  of  concerns 
whose  good  will  is  certainly  of  enormous  value,  to  ascer- 
tain if  possible  how  that  value  was  arrived  at.  The  an- 
swers received  were  utterly  irreconcilable.  A  number  re- 
plied in  substance,  "We  do  not  put  any  estimate  on  such 
matters  as  good  will,  trade-marks,  etc. — we  never  carry 
them  on  our  books". 

A  confectionery  manufacturer  replied: 

No  separate  value  is  given  to  trade-marks.  Trade-marks,  unless 
carried  in  a  specific  account  and  given  a  specific  value,  should  be  con- 
sidered as  part  of  the  value,  as  given  by  us,  of  good  will. 

Good  will  represents  a  trade-getting  and  trade-holding  value. 

This  is  made  up  of  the  general  reputation  and  prestige  of  our  com- 
pany, its  products  and  its  service  and  the  demands  for  our  products 
under  names,  designs,  processes  or  trade-marks  controlled  by  it. 

This,  therefore,  entitles  trade-marks  to  be  reckoned  with  in  deter- 
mining the  value  of  our  good  will. 

26 


ELEMENTS    AND     APPRAISAL 

A  packing  company  executive  replied : 

This  company  takes  no  account  of  good  will,  nor  of  its  trade-mark, 
both  of  which  are  very  valuable.  Trade-marks  and  trade  names  are 
often  carried  separately.  In  other  instances  trade-marks  and  patents 
are  carried  as  an  asset  until  the  corporation  is  going  well,  after 
which  they  are  thrown  into  good  will  and  carried  as  one  item. 

A  prominent  clothing  manufacturer  said: 

To  illustrate  my  personal  views  in  the  matter  of  good  will  and 
trade-mark  values  as  an  asset  on  the  books  of  a  corporation,  take 
a  corporation  that  has  grown  up  without  any  reorganization  or  ex- 
cessive expenses  which  can  be  offset  by  an  account  designated  "good 
will"  or  trade-mark  values,  or  both.  The  usual  procedure,  of  course, 
is  to  charge  all  advertising  and  the  like  to  an  expense  account  and 
not  to  a  capital  account.  In  the  course  of  time  this  creates  a  value 
to  a  going  concern  which  does  not  show  on  the  books.  I  do  not  know 
of  a  case  where  this  good  will  valuation  has  been  capitalized. 

A  bank  cashier  wrote : 

It  is  my  understanding  that  heretofore  the  prospective  earnings 
of  concerns  have  frequently  been  capitalized  in  the  form  of  good  will 
or  trade-marks  for  about  as  much  as  the  traffic  would  bear.  I  think 
there  is  no  set  rule  fixing  the  amount  of  these  items.  Some  concerns 
wish  to  begin  paying  dividends  upon  their  common  stock,  which  may 
represent  either  good  will  or  trade-marks,  very  shortly,  while  others 
are  willing  to  wait  the  lapse  of  some  years  before  beginning  to  pay 
dividends,  having  capitalized  these  items  for  a  larger  amount  than 
would  be  the  case  with  those  purposing  to  pay  dividends  quickly. 

In  the  comptroller's  statement  of  capitalization,  In- 
ternational Harvester  Company,  it  is  said: 

No  capital  stock  was  issued  or  cash  paid  for  the  patents,  trade- 
marks, shop  rights,  good  will,  etc.,  which  this  company  received 
through  the  purchase  of  plants  and  properties  at  the  time  of  organiza- 
tion. Those  patents,  trade-marks,  etc.,  were  purchased,  originated,  or 
established  at  great  cost  by  the  former  owners  during  long  and 
successful  terms  of  business,  and  are  a  valuable  asset  to  the  com- 
pany. In  the  appraisal  of  personal  property,  the  good  will  of  the 
vendor  companies  are  valued  at  $18,957,771,  and  their  patents,  trade- 
marks, shop  rights,  etc.,  were  valued  at  $1,895,777.  But  in  order 
that  the  capital  stock  of  the  International  Harvester  Company  might 
only  be  issued  for  cash  and  physical  properties  fairly  and  reasonably 
appraised,  the  vendors  agreed  to  waive  the  compensation  due  them 
for  the  value  of  their  patents  and  good  will. 

The  manufacturer  of  a  famous  brand  of  stoves  sug- 
gested this  method: 

Any  business   concern  that  has  a  trade-mark  which  has  become 

27 


BUILDING     GOOD      WILL 

popular  and  is  used  in  general  advertising  finds  this  trade-mark  very 
valuable,  or  there  is  a  lack  of  good  business  management,  in  the 
opinion  of  the  writer,  if  it  is  not  made  so.  Ours  is  considered 
very  valuable  to  us  and  is  represented  by  common  stock.  Preferred 
stock  represents  with  us  merchandise,  real  estate,  buildings,  ma- 
chinery and  everything  that  is  taken  into  consideration  in  the  inven- 
tory at  the  close  of  the  year.  We  were  at  one  time  asked  if  we 
would  sell  our  good  will  and  trade-mark  for  the  amount  at  which 
we  valued  our  general  plant.  Our  answer  was,  "No."  We  consider 
our  trade-mark  a  very  valuable  asset.  A  great  deal  of  money  has 
been  spent  to  popularize  our  make  of  stoves  and  when  we  capitalized 
this  institution  with  preferred  and  common  stock,  the  preferred 
stock  represented  what  our  assets  showed  at  a  low  valuation  and 
the  common  stock  represented  the  same  amount,  as  good  will  or 
value  of  trade-mark. 

The  producer  of  a  nationally  advertised  foodstuff,  in 
conference,  outlined  his  plan  in  this  way: 

We  figure  that  it  takes  five  years  to  get  a  foothold  in  a  market. 
This  number  is  merely  our  guess  at  the  average  time.  In  some 
cases  it  takes  three  or  four,  in  others  longer.  We  figure  that  our 
total  advertising  expenditure  for  five  years  back  represents  an 
investment  in  good  will  at  par.  At  the  beginning  of  1914  we  charged 
off  1908  advertising  and  held  the  rest  on  the  books  as  a  good  will 
asset.  We  realize  that  this  plan  is  entirely  arbitrary. 

The  auditor  of  a  great  automobile  company  replied : 

Undoubtedly  the  good  will  under  discussion  is  the  good  will  of 
the  proprietors  or  stockholders  of  a  company. 

I  can  imagine  a  time,  years  ago,  when  the  good  will  of  an  honest, 
honorable  and  successful  merchant  retiring  from  business  expressed  in 
recommending  to  his  patrons  a  continuance  of  their  patronage  to  his 
successor,  would  be  of  value  to  his  successor,  for  his  good  will 
undoubtedly  vouched  to  his  patrons  an  assurance  that  they  would 
receive  the  same  honest  and  fair  treatment  at  the  hands  of  his 
successor  as  they  had  received  in  their  transactions  with  him.  As 
the  retiring  merchant  would  not  give  this  assurance  unless  he  had 
an  intimate  knowledge  of  his  successor,  the  whole  thing  resolves 
itself  into  a  close  knowledge  of  individuals,  embracing  the  retiring 
merchant,  his  successor,  and  the  customers. 

Now,  if  this  is  the  foundation  for  the  value  of  good  will,  it  will 
not  take  anyone  long  to  realize  how  valueless  it  is  in  this  day  of 
transactions  with  parties  who  do  not  have  even  a  speaking  acquaint- 
ance with  each  other. 

In  the  days  that  I  mention,  there  were  few  statements,  or  trial 
balances,  to  express  the  value  of  a  business,  and  so  transactions  were 
based  upon  what  the  man  owned,  less  his  debts,  plus  something 

28 


ELEMENTS    AND     APPRAISAL 

for  the  profitable  relations  he  had  been  enabled  to  establish  between 
his  customers  and  himself,  good  will. 

In  statements  of  affairs  today,  a  successful  business  is  expressed 
by  a  surplus  account,  and  the  unsuccessful  business  is  indicated  by 
a  deficit  account,  and  there  is,  therefore,  no  room  for  good  will, 
for  it  is  not  and  never  has  been  a  unit  of  intrinsic  value.  Today  it 
is  no  more  than  a  convenient  way  to  balance  a  statement  of  affairs, 
and  it  has  no  place  in  the  trial  balance  that  is  rendered  as  an 
accurate  representation  of  affairs. 

We  have  no  good  will  in  our  trial  balance,  nor  do  we  capitalize 
trade  names  or  trade-marks. 

The  excuse  for  these  extended  quotations  is  that  they 
show,  more  convincingly  than  any  mere  statement,  the 
divergent  views  held  by  able  business  men  respecting  the 
capital  value  of  probable  trade  continuance  resulting 
from  past  satisfactory  dealings. 

Trade-marks  and  other  means  by  which  goods  or  a 
business  is  identified  and  distinguished  from  others,  are 
what  make  good  will  effective.  The  identifying  means 
are  the  symbols  of  good  will.  Identification  is  indispen- 
sable or  there  can  be  no  choice,  and  the  means  of  identifi- 
cation manifestly  should  not  be  separated  from  the  things 
which  they  identify.  Trade-marks  and  other  identifying 
badges  are  inseparable  from  the  good  will,  and  merely 
embody  the  reasonable  expectancy  of  future  voluntary 
dealings.  In  appraising  this  expectancy  the.  past  is  the 
only  guide. 

Probably  as  fair  a  way  as  any  to  put  a  money  value 
on  so  intangible  and  elusive  a  thing  as  good  will  is  that 
suggested  in  one  of  the  above  opinions  and  to  my  knowl- 
edge tested  in  practice  by  nearly  a  score,  including  cloth- 
ing, glove  and  food  product  makers,  among  others1.  Take 
the  earnings  of  the  company  over  a  sufficient  period  to 
make  generalizations  safe — five,  or  better  still,  ten  years. 
Deduct  a  fair  return  upon  the  tangible  property.  Sub- 
tract also  the  earnings,  as  nearly  as  can  be  ascertained, 
from  rights  under  patents  or  copyrights,  and  from  every- 
thing such  as  franchises  and  strategical  advantages  that 
compel  future  dealings.  These  last  items  frequently  pre- 
29 


BUILDING     GOOD      WILL 

sent  serious,  but  not  necessarily  impossible  problems. 
What  now  remains  are  the  earnings  due  to  the  friendli- 
ness of  customers  and  the  public.  Capitalized  at  an 
agreed  per  cent  depending  upon  the  risks  and  condition 
of  the  business,  and  the  efficiency  of  the  management, 
this  gives  the  approximate  value*  of  the  current  good 
will,  except  as  it  may  have  been  affected  by  sudden 
fluctuations. 

The  tangible  assets  of  a  company  are,  we  will  say, 
$100,000.  After  necessary  deductions  for  depreciation, 
the  business  has  during  the  last  five  years  earned  an  aver- 
age of  $9,000.  Deducting  six  per  cent  for  the  money 
invested,  earnings  to  the  amount  of  three  thousand  dol- 
lars remain  to  be  capitalized.  On  a  basis  of  six  per  cent 
this  would  be  approximately  $50,000.00  additional  cap- 
ital, setting  a  total  of  $150,000.00  capital  value.  In  a 
conservative,  well-managed  corporation  this  method  of 
appraising  good  will  would  not  be  an  unsafe  practice. 
Since  the  average  return  on  securities  approximates  this 
percentage,  stocks  so  priced  find  a  market,  being  quoted 
above  or  below  par,  according  to  the  judgment  of  in- 
vestors as  to  the  risks  and  chances  they  involve. 

In  a  non-corporate  business,  however,  there  is  no  such 
adjustment  of  the  estimated  value  of  good  will.  It  is 
usual,  therefore,  to  agree  on  the  tangible  assets  and  to 
consider  the  remaining  profit  as  ten  to  fifteen  per  cent 
on  the  value  of  the  good  will,  including  perhaps  six  per 
cent  as  an  investment  return,  with  three  to  five  per  cent 
each  for  (1)  the  responsibility  and  personal  efficiency  of 
management  and  (2)  for  the  risk  involved. 

The  foregoing  is  not  intended  as  a  prescription  that 
will  fit  all  cases,  but  rather  as  a  reasonably  safe  method 
of  getting  at  what  may  be  regarded  as  a  common  ground 
for  bargaining  between  buyer  and  seller. 

*  A  more  extended  discussion  of  the  valuation  of  good  will  in  recognized 
aco  unting  practice  may  be  found  in  W.  M.  Cole's,"  Accounts,"  p.  276-280, 
306  311,  and  H.  R.  Hatfield's,  "Modern  Accounting,"  p.  110. 


30 


PART  II 

HELPING  THE  PUBLIC  IDENTIFY 
YOUR  PRODUCT 


CHAPTER  III 

TRADE -MARKS  AND  WHAT 
THEY  STAND  FOR 


WITHOUT  good  will  all  business  which  is  not  monop- 
olistic would  be  temporary — depending  as  it  would 
have  to  on  casual  patronage  only.  The  element  of  good 
will — the  desire  on  the  part  of  customers  to  keep  up 
more  or  less  continuous  trade  relations  and  the  reason- 
able expectation  of  such  continuance  on  the  part  of  the 
trader,  is  what  gives  permanency  and  stability  to  busi- 
ness. Good  will  is  dependent  on  identification.  It  ad- 
heres to  the  means  by  which  the  business  or  commodity 
toward  which  the  patron's  or  purchaser's  friendliness  is 
directed,  may  be  distinguished  from  those  toward  which 
this  friendliness  is  not  felt  or  which  are  unknown  and 
produce  no  reaction  favorable  or  otherwise. 

The  development  of  business  in  the  past  furnishes  curi- 
ous parallels  with  present  conditions.  Similar  problems 
were  met,  and  strikingly  similar  solutions  were  devised. 

The  extent  of  the  use  of  trade-marks  is  an  accurate 
index  of  commercial  conditions.  When  trading  was  face 
to  face,  the  purchaser  of  a  commodity  dealing  directly 
with  the  producer,  a  trade-mark  was  not  used  because 
none  was  necessary.  The  purchaser  necessarily  knew 
whose  product  he  bought,  and  by  returning  to  the  same 
place  was  sure  again  of  trading  with  the  same  individual 
and  again  of  purchasing  the  article  desired.  The  locality 
of  the  place  was  the  essential  means  of  identification  and 
the  seat  of  the  good  will.  As  soon,  however,  as  a  par- 
ticular maker,  by  the  excellence  of  his  manufacture, 

33 


IDENTIFYING     YOUR     PRODUCT 

acquired  a  reputation  outside  of  his  immediate  locality, 
in  order  to  visualize  and  perpetuate  that  reputation  he 
adopted  and  used  a  mark  to  distinguish  his  product  from 
others.  When  the  eye  salves  of  the  Roman  oculists  be- 
came famous,  and  were  sent  all  over  the  known  world, 
trade-marks  were  placed  upon  them.  When  the  tapestries 
of  the  Brussels  makers  were  sold  abroad,  marks  were 
adopted  and  used  to  identify  them.  The  importance  of 
any  industry  and  the  quality  of  the  goods  it  produces 
can  pretty  accurately  be  gauged  by  the  extent  to  which 
trade-marks  are  used  in  the  industry  and  on  the  goods. 
For,  if  the  market  is  at  all  extensive,  and  the  goods  are 
sold  generally,  a  means  of  identification  to  the  ultimate 
purchaser  is  essential — unless  the  quality  of  the  product 
is  not  good,  when  no  producer  cares  to  identify  it  as  his. 

WHEN  TRADE-MARKS  WERE  FIRST  USED 

Most  of  the  text  books  on  the  subject  of  trade-marks 
begin  with  the  case  of  Southern  v.  How,  the  date  of  which 
is  doubtful,  but  which  was  probably  decided  in  the  reign 
of  Queen  Elizabeth.  It  is  either  expressly  asserted,  or  by 
implication  the  impression  is  conveyed  that  trade-marks 
are  a  comparatively  modern  thing,  when,  as  a  matter  of 
fact  few  human  institutions  can  boast  a  more  respectable 
antiquity.  The  use  of  trade-marks  dates  from  the  very 
earliest  times  of  which  we  have  any  knowledge. 

The  recent  excavations  in  Asia  Minor  and  in  Egypt 
have  revealed  bricks  bearing  names  which  are  supposed 
to  be  those  of  the  manufacturer,  accompanied  in  many 
instances  by  devices.  Roman  bricks  similarly  marked 
have  frequently  been  found.  These  inscriptions  are  of 
various  kinds.  In  the  days  of  republican  brevity  the  date 
alone  usually  appears — sometimes  the  initials  of  the  con- 
suls or  the  name  of  the  maker.  During  the  period  of  the 
Empire  more  elaborate  inscriptions  occur — the  names  of 
the  owners  of  the  estates  where  the  kilns  were  located, 
those  of  the  owners  or  lessees  of  the  factories,  and  those 
of  the  freedmen  or  slaves  in  charge  of  the  work.  In  many 

34 


WHAT     TRADE-MARKS     STAND     FOR 

cases  the  inscription  is  accompanied  by  a  picture  or  a 
figure.  It  has  been  supposed  that  in  addition  to  per- 
forming the  function  of  a  trade-mark  these  names  and 
devices  indicate  a  governmental  or  official  regulation. 

A  number  of  Roman  writers  on  architectural  subjects 
advised  that  bricks  be  kept  from  two  to  five  years  so  that 
they  be  thoroughly  dried.  In  some  places  bricks  could 
not  be  used  in  building  until  after  the  approval  of  a 
magistrate  attesting  that  they  had  been  moulded  for 
five  years.  Whatever  may  have  been  the  direct  reason 
for  these  inscriptions,  whether  they  were  voluntary  adver- 
tising, or  the  result  of  governmental  regulation,  the  fact 
remains  that  from  a  very  early  date  they  were  used  ex- 
actly as  trade-marks  are  today,  to  indicate  the  origin  of 
the  article. 

The  Greeks  marked  their  works  of  art  with  the  name 
of  the  sculptor.  Greek  pottery  from  the  earlier  times  has 
borne  inscriptions,  usually  the  name  of  the  maker  and  on 
decorated  pieces  the  name  of  the  decorator.  The  cup 
handles  from  the  Ceramicus  of  Athens  beside  the  maker's 
name  often  bore  real  trade-marks  such  as  figures  of  Mer- 
cury staffs,  oil  jugs,  bees,  lions'  heads,  and  the  like. 
Greek  inscriptions  have  been  found  on  Etruscan  vases 
dated  from  800  to  400  B.  C.  This  has  suggested  the 
question  whether  these  vases  were  truly  a  Greek  product, 
or  whether  the  Etruscan  potter  had  copied  the  trade- 
mark of  some  celebrated  Greek  maker,  as  the  Roman 
engravers  and  sculptors  were  in  the  habit  of  doing  in 
later  times. 

Marks  upon  goods  were  in  very  general  use  among  the 
Romans.  Wherever  exist  relics  of  Roman  life,  from 
Syria  to  Britain,  are  found  the  names  of  workmen,  of 
manufacturers  and  of  traders,  pictorial  marks,  marks  of 
local  origin  and  chronograms.  It  is  hardly  too  much  to 
say  that  trade-marks  played  almost  the  same  part  in 
Ancient  Roman  commercial  life  as  they  do  today. 

The  Italian  stone  cutters'  marks  go  back  to  very  early 
times.  They  are  found  in  the  ancient  Roman  city  walls, 
in  the  buildings  of  the  Palatine,  and  upon  the  stones  that 

35 


IDENTIFYING     YOUR     PRODUCT 

make  up  the  walls  of  the  city  of  Pompeii. 

It  has  been  possible  to  compile  what  is  believed  to  be 
a  fairly  complete  list  of  Roman  lamp  makers  from  the 
names  and  trade-marks  found  upon  fragments  of  clay 
lamps. 

The  inscriptions  found  upon  lamps  consist  of  simple 
trade-marks,  the  names  of  makers,  or  of  places  and  towns 
where  they  were  made,  that  of  the  pottery  or  of  the  pro- 
prietors, the  date  of  manufacture,  dedication  to  deities, 
the  acclamations  used  at  the  public  games,  events  or  facts. 
The  little  marks  used  by  the  potter,  either  instead  of  his 
name,  or  in  conjunction  with  it,  are  of  the  first  class. 
There  is  no1  very  great  variety  of  symbols ;  they  usually 
are  of  the  simplest  kind,  such  as  circles,  half-moons,  the 
print  of  a  human  foot,  wheels,  palm  branches,  or  the  vine 
leaf.  Although  the  inscriptions  upon  lamps  are  by  no 
means  so  numerous  or  complete  as  those  upon  tiles,  yet 
they  are  instructive  with  regard  to  the  potteries.  A  con- 
siderable portion  only  indicate  that  they  were  made  by 
slaves,  since  they  bear  single  names,  such  as  Agatho, 
Attius,  Arion,  Aquilinus,  Cinnamus,  Bassa,  Bagradus, 
Draco,  Diogenes,  Heraclides,  Fabrinus,  Fortis,  Faber, 
Faustus,  Inuliucos,  Memmius,  Monos,  Maximus,  Mun- 
tripus,  Nereus,  Oppius,  Primus,  Priscus,  Pastor,  Publius, 
Probus,  Rhodia,  Stephanus,  Successivus,  Tertullus,  Vibi- 
anus,  Victorinus,  and  Vitalis.  These  names  generally  oc- 
cur in  the  genitive,  the  word  officina,  "manufacture"  or 
"factory",  being  understood.  One  rare  specimen  has 
"Diogenes  fecit",  and  several  makers  use  /.  for  fecit  after 
their  names. 

Angelo  Mosso  in  his  Dawn  of  Mediterranean  Civiliza- 
tion, in  discussing  neolithic  culture,  calls  attention  to  a 
collection  of  prehistoric  Egyptian  pottery  marks,  the 
so-called  signaries  of  the  First  Dynasty,  which  were  dis- 
covered on  the  cases  in  the  tombs  of  Abydos.  These 
signs  are  so  different  from  the  hieroglyphics  that  Dr. 
Petrie  has  treated  them  separately.  The  origin  of  this 
script  is  lost  in  the  darkness  of  the  neolithic  age.  Mosso 
concludes  that,  as  was  the  case  with  stone  weapons,  pots 

36 


WHAT     TRADE-MARKS     STAND     FOR 

were  not  always  made  at  home,  but  that  there  were 
special  factories  whose  goods  were  distinguished  by  the 
marks  upon  them.  To  quote: 

At  Tordos  in  Hungary,  for  example,  makers'  marks  similar  to 
those  of  Egypt  were  found  on  the  pottery,  and  though  the  vases 
are  of  the  neolithic  age,  the  marks  resemble  the  Minoan  masons' 
marks  carved  on  the  blocks  of  Knossos  and  Phaetos.  This  fact 
indicates  the  existence  of  a  common  civilization  over  the  whole  of  the 
Mediterranean  and  the  continent  of  Europe,  before  Egypt  and  the 
Isle  of  Crete  possessed  a  distinct  culture  of  their  own.  We  find 
the  same  signs  in  various  countries  of  the  Mediterranean,  and  Dr. 
Petrie  refers  to  Spain  and  Caria,  as  examples,  attributing  great 
importance  to  the  fact  that  they  continued  in  use  in  Egypt  from  6000 
to  1200  B.  C. 

From  the  time  of  the  neolithic  age  certain  signs  were  used  by 
seamen  to  enable  their  vessels  to  be  recognized  from  a  distance. 
They  consist  of  horns  grouped  in  various  ways  and  fixed  upon  a 
shaft,  or  of  figures  of  animals  or  branches  of  a  tree.  These  signs 
were  found  upon  neolithic  vases  by  Dr.  Petrie  in  Upper  Egypt, 
and  Professor  Tsountas  discovered  exactly  the  same  signs  in  his 
excavations  in  Greece.  They  include  fish  and  figures  standing  at 
the  prow  of  the  vessels,  incised  on  the  vases. 

Trade-marks  were  not  peculiar  to  pottery,  but  are 
found  on  lead  pipe  and  marble,  on  bronze  instruments, 
upon  gold,  silver  and  iron  articles,  upon  knives  and 
gems.  Professor  Kelsey  in  his  translation  of  Mau's  "Life 
and  Art  of  Pompeii",  states  that  there  have  been  found 
in  Pompeii  a  large  number  of  small  jars  containing  the 
fish  sauces  of  which  the  ancients  were  so  fond.  One  bears 
this  inscription:  "Scaurus's  tunny  jelly,  Blossom  brand 
put  up  by  Eutyches,  Slave  of  Scaurus."  Besides  the  seals 
which  were  used  in  signing  documents  the  Romans  had 
stamps,  signacula,  which  they  impressed  upon  various  ar- 
ticles as  a  means  of  identification  or  as  an  advertisement. 
Impressions  of  such  stamps  are  found  upon  bricks  and 
other  objects  of  clay — and  in  one  or  two  instances  upon 
loaves  of  bread.  Several  charred  loaves  in  the  Naples 
Museum  have  the  stamp  (C)  eleris  Q.  Grant  Veri  Ser., — 
"(made  by)  Celer,  Slave  or  Quintus  Granius  Verus". 

The  Roman  oculists  sent  their  eye  salves  all  over  the 
vast  Roman  Empire.  The  dry  cakes  were  often  stamped 
with  the  name  of  the  physician,  the  formula  and  direc- 

37 


IDENTIFYING     YOUR     PRODUCT 

tions  for  use.  These  marks  were  placed  not  only  on  solid 
remedies,  but  on  earthen  vessels  containing  liquids.  Speci- 
mens of  these  ancient  patent  medicines  have  been  found 
in  England,  in  France  and  in  Germany. 

The  origin  of  wine  was  marked  on  the  jars,  and  the 
famous  cheese  of  Etruscan  Luna  was  marked  with  the 
picture  of  the  city.  Martial  refers  to  this  fact.  In  his 
epigrams  (xxx  Book  xiii)  he  says:  "A  cheese  from  Luna. 
This  cheese  marked  with  the  likeness  of  the  Etruscan 
Luna  will  serve  your  slaves  a  thousand  times  for  break- 
fast." The  mark  was  probably  some  emblem  of  the  moon 
or  Diana. 

Signs  for  inns  and  shops  were  as  well  known  as  they 
are  now.  There  was  the  Elephant  Inn  in  Pompeii  with 
the  sign  of  the  elephant  and  the  words  "Hospitium  hie 
locatur  triclinium  cum  tribus  lectis  et  com  (modis)"* 
(An  inn  with  a  dining  room  with  three  comfortable 
couches).  On  the  tangs  of  the  Norse  swords  of  the  early 
iron  age  frequently  found  in  the  mosses  of  Schleswig  are 
the  names  of  the  armorers. 

Dr.  Kohler,  speaking  of  the  use  of  trade-marks  in 
ancient  Rome,  says: 

All  of  this  shows  us  a  side  of  Roman  commercial  life  which  is 
often  overlooked  by  legal  historians;  Roman  commercial  relations, 
although  resting  on  diiferent  principles,  were  not,  in  their  results, 
as  different  from  our  own  as  has  been  generally  supposed;  the 
Roman  world  in  the  time  of  the  empire  was  moved  by  the  same 
general  impulses  of  trade  as  today.  These  manufacturers'  marks 
are  not  unique;  they  are  connected  with  the  same  system  of  marking 
that  is  known  in  modern  trade. 

It  is  not  our  purpose  to  mention  the  particular  marks  antiquity 
presents  to  us  and  to  draw  from  them  the  information  which  they 
furnish  upon  the  history  of  ancient  manufacture  and  trade.  It 
is  not  our  purpose  to  specify  the  particular  marks  which  show  how 
ancient  commerce  grew  and  decayed,  how  it  extended  itself  in 
widening  circles,  and  finally  again  contracted  into  narrow  limits. 
Neither  need  we  mention  the  great  help  furnished  by  chronograms 
in  ancient  political  history  and  in  the  history  of  ancient  buildings 
and  architecture.  Our  object  is  only  to  demonstrate  that  the  whole 
institution  in  ancient  times  was  not  exceptional;  that  it  was  an 
institution  of  the  first  rank,  and  one  which  covered  the  whole  terri- 
tory of  the  ancient  civilized  world.  It  is,  however,  doubtful  whether 
this  institution  of  commerce  ever  became  a  system  of  established 


WHAT     TRADE-MARKS     STAND     FOR 

law,  and   whether   it   did   not   rely   upon   commercial   honesty   and 
integrity  rather  than  upon  the  law. 

During  the  Middle  Ages  it  was  a  common  practice  to 
mark  upon  artistic  productions  the  name,  monogram  or 
device  of  the  artist  or  workman.  The  practice  of  sign- 
ing paintings  is  an  example.  Not  only  was  this  the  case, 
but  such  monograms  were  protected  against  infringement. 
A  decree  of  the  Council  of  Nuremburg  in  the  year  1512 
provides,  "Whereas,  a  certain  foreigner,  who  sells  engrav- 
ings under  the  Council  Chamber,  has,  among  others,  cer- 
tain ones  bearing  the  signatures  of  Albrecht  Diirer 
therefore,  it  is  ordered  that  he  shall  obliterate  all  such 
signatures,  and  keep  no  more  such  engravings  in  future, 
and  if  he  shall  neglect  so  to  do,  he  shall  be  brought  before 
the  Council  of  fraud". 

In  France  trade-marks  were  in  use  from  the  very 
earliest  times.  They  were  regarded  as  property  and  pro- 
tected against  infringement  by  civil  remedies. 

As  early  as  the  thirteenth  century,  the  copying  of  val- 
uable marks  became  so  common  and  so  injurious  that 
infringement  was  made  a  misdemeanor  and  in  some  cases 
even  a  felony,  and  was  punished  in  the  barbarous  manner 
characteristic  of  the  times.  The  Elector  Palatine  in  the 
fourteenth  century  issued  an  edict  which,  after  reciting 
that  the  sale  of  spurious  wine  was  the  most  outrageous 
form  of  deceit,  punished  by  hanging  any  innkeeper  who 
sold  ordinary  wine  as  Rudesheimer. 

PENALTIES  FOR  INFRINGEMENT  FOUR  CENTURIES  AGO 

An  edict  of  Charles  V.  of  May  16,  1544,  concerning 
Flemish  tapestries,  provided  that  "any  master  workman 
who  makes  or  causes  to  be  made  any  such  tapestry,  shall 
work  upon  one  end  and  upon  the  bottom  of  the  said  tap- 
estry a  mark  or  symbol,  and  such  signs  as  the  city  may 
require ;  that  it  may  be  known  by  the  said  marks  of  what 
city  and  of  what  master  the  said  tapestry  is  a  product". 
Infringers  were  punished  by  cutting  off  the  right  hand. 
In  France  a  royal  edict  of  Charles  IX).  in  1564  placed 

39 


IDENTIFYING     YOUR     PRODUCT 

imitators  of  marks  in  the  same  category  as  counter- 
feiters, who  were  punished  capitally.  This  was  subse- 
quently modified  by  reducing  the  punishment  to  the  gal- 
leys. Other  similar  edicts  were  issued,  notably  the 
statutes  protecting  the  drapers  of  Carcassone  (1666), 
which  imposed  the  penalty  of  the  pillory  on  infringers. 

By  ordinance  of  Amiens  (1374),  every  smith  was  re- 
quired to  place  a  mark  "different  from  any  other"  upon 
the  metal  work,  "so  that  *  *  *  it  may  be  known 
who  made  it". 

There  was  a  similar  ordinance  of  about  the  same  date 
in  Abbeville. 

The  same  duty  was  required  of  goldsmiths  (1376),  of 
weavers  (fifteenth  century)  and  of  calendars  (1518). 
Imitation  of  these  marks  was  punished. 

These  acts  seem  to  have  been  special,  applying  only  to 
particular  trades  and  resulted  in  the  anomaly  of  making 
infringement  when  committed  in  one  trade  a  felony  and 
in  another  only  a  civil  wrong. 

In  France,  at  least  as  early  as  the  fourteenth  century, 
each  workman  had  his  mark,  with  which  he  was  required 
to  mark  his  products.  It  was  not  optional,  but  obliga- 
tory, for  the  purpose  of  showing  who  was  responsible  for 
the  work.  In  addition  to  this  private  marking,  there  was 
the  public  stamping  after  inspection  and  approval.  As 
a  corollary,  a  member,  for  example,  of  the  corporation 
of  mercers  was  required  to  promise  "not  to  lend  his  mark 
to  anyone  whatever,  to  keep  open  shop",  etc.  Such  lend- 
ing of  a  mark  was  declared  to  be  a  violation  of  good 
faith  and  of  the  public  ordinances  in  relation  to  marks. 
This  is  the  present  law.  It  was  said  in  a  leading  case: 

If  the  legislature  and  the  courts  are  thus  sedulous  to  protect  the 
rights  of  individuals  in  respect  to  their  own  inventions,  labels,  and 
devices,  it  would  seem  to  be  implied  that  such  individuals  should  not 
themselves  attempt  or  allow  any  imposition  upon  the  public  by  the 
false  and  fraudulent  use  of  such  labels,  devices,  or  names,  or  inven- 
tions, for  the  sale  of  spurious  or  stimulated  articles.  The  fact  that 
the  defendant  contracted  to  purchase,  and  the  plaintiffs  to  sell  a 
large  number  of  empty  papers,  or  bags,  for  seeds,  with  the  plaintiffs' 
labels  thereon,  implied,  as  was  doubtless  the  fact,  that  the  plaintiffs 

40 


WHAT     TRADE-MARKS     STAND     FOR 

had  acquired  a  high  credit  with  the  public  for  the  good  qualities 
of  their  seeds,  and  that  their  labels  upon  bags  or  papers  of  seeds 
would  secure  for  them  a  ready  sale  and  at  appreciating  prices. 
Money  received  by  the  defendant  in  the  sale  of  the  seeds  he  was 
to  put  in  these  bags  and  papers  sold  to  him  by  the  plaintiffs,  would 
be  money  obtained  by  deceit  and  fraud,  if  not  by  false  pretenses. 
Perhaps  the  provision  in  the  contract,  that  the  defendant  should 
fill  the  bags  with  seeds  of  a  good  quality,  might  save  the  parties 
from  a  conviction  for  a  conspiracy  to  commit  an  act  "injurious  to 
trade  or  commerce,"  under  subdivision  6,  of  section  8,  chapter  1,  of 
part  4,  of  the  Revised  Statutes.  But  if  it  be  a  crime  to  counterfeit 
labels,  words,  or  devices  previously  appropriated  to  distinguish  proper- 
ty, or  to  vend  goods  thus  stamped,  without  disclosing  the  fact  to  the 
purchaser,  it  is  equally  an  offense  against  the  spirit  of  the  law,  equally 
injurious  to  trade  and  commerce  and  equally  an  imposition  upon 
the  public,  to  palm  off  spurious  goods  under  cover  of  genuine  labels 
and  devices.  Contracts  to  do  this  are  clearly  against  public  policy 
and  should  not  be  upheld  and  enforced  by  the  courts.  The  demurrer 
in  this  case  to  the  second  cause  of  action — as  the  consideration  is 
entire — is  well  taken,  and  the  decision  of  the  special  term  should 
be  reversed. 

It  is  known  that  during  the  fifteenth  and  sixteenth 
centuries,  workers  in  metals,  weavers  of  tapestries,  paper 
makers,  publishers,  printers,  smiths,  tanners  and  armorers 
had  and  used  trade-marks. 

The  use  of  trade-marks  by  printers  was  the  inevitable 
consequence  of  the  conditions  which  resulted  from  the 
absence  of  any  notion  of  property  in  literary  work. 

For  many  years  after  the  invention  of  printing  there 
was  nothing  which  corresponded  to  the  copyright  laws 
of  more  modern  times.  Original  contributions  to  litera- 
ture were  few;  what  was  new  was  suspected  of  being 
heretical  and  not  to  be  encouraged.  The  books  of  the 
day  consisted  almost  entirely  of  the  Greek  and  Latin 
classics  and  the  writings  of  the  fathers  of  the  church. 
The  end  sought  was  not  originality  but  accuracy  and 
the  publication  of  such  works  as  these  presented  many 
difficulties  in  the  securing  of  trustworthy  texts  from  more 
or  less  doubtful  manuscript  and  in  educating  compositors 
correctly  to  put  such  texts  into  type.  The  work  of  the 
reviser  and  proof  reader  under  such  circumstances  de- 
manded a  very  high  standard  of  scholarship  and  a  wide 
range  of  knowledge.  Erasmus  himself  acted  in  this 

41 


IDENTIFYING     YOUR     PRODUCT 

capacity  for  Aldus  of  Venice  and  Froben  of  Basle.  Such 
printer-publishers  as  Aldus  acquired  a  great  reputation 
for  the  accuracy  of  their  texts.  Monograms  and  devices 
of  various  kinds  were  used  to  identify  as  theirs  the  books 
that  they  published.  The  dolphin  and  anchor  of  Aldus, 
the  representation  of  a  printing  press  of  Badius  and  the 
monogram  of  Caxton  are  familiar  examples.  There  being 
no  copyright  protection,  other  publishers  pirated  the 
literary  contents  of  the  works  with  impunity,  but  not 
being  content  with  this  copied  the  trade-marks  of  the 
publishers.  In  the  preface  to  Aldus's  Livy  (1518)  there 
appears  this  warning. 

Lastly,  I  must  draw  the  attention  of  the  student  to  the  fact  that 
some  Florentine  printers,  seeing  that  they  could  not  equal  our 
diligence  in  correcting  and  printing,  have  resorted  to  their  usual 
artifices.  To  Aldus's  Institutiones  Grammatics,  printed  in  their  of- 
fices, they  have  affixed  our  well  known  sign  of  the  Dolphin  wound 
round  the  Anchor.  But  they  have  so  managed  that  any  person  who 
is  in  the  least  acquainted  with  the  books  of  our  production,  cannot 
fail  to  observe  that  this  is  an  impudent  fraud.  For  the  head  of 
the  Dolphin  is  turned  to  the  left,  whereas  that  of  ours  is  well  known 
to  be  turned  to  the  right. 

This  form  of  trade  piracy  seems  to  have  been  a  com- 
mon practice.  Benedict  Hector  of  Bologna  cautions 
buyers  of  his  "Justinus  et  Florus": 

Purchaser,  give  heed  when  you  wish  to  buy  books  issued  from  my 
printing  office.  Look  at  my  sign,  which  is  represented  on  the  title 
page,  and  you  can  never  be  mistaken.  For  some  evil-disposed  printers 
have  affixed  my  name  to  their  uncorrected  and  faulty  works,  in  order 
to  secure  a  better  sale  for  them. 

And  Jodocus  Badius  of  Paris  gives  a  similar  warning: 

We  beg  the  reader  to  notice  the  sign,  for  there  are  men  who  have 
adopted  the  same  title,  and  the  name  of  Badius,  and  so  filch  our 
labor. 

The  abuse  became  so  prevalent  that  in  the  regulations 
of  the  Milanese  Printers'  Guild,  there  appeared  the  fol- 
lowing: "No  printer  or  dealer  must  use  for  his  sign  a 
token  identical  with  or  closely  similar  to  that  already  in 
use  with  an  authorized  printer  or  dealer." 

That  these  symbols  were  regarded  as  valuable  prop- 

42 


WHAT    TRADE-MARKS    STAND    FOR 

erty  is  evident  from  the  fact  that  it  is  said  of  Reynold 
Wolf,  whose  sign  was  a  Brazen  Serpent,  "His  trade  was 
continued  a  good  while  after  his  demise  by  his  wife 
Joan,  who  made  her  will  the  first  of  July,  1574,  whereby 
she  desires  to  be  buried  near  her  husband  in  St.  Faith's 
Church,  and  bequeathed  to  her  son,  Robert  Wolf,  the 
chapel  house  (their  printing  office),  the  Brazen  Serpent, 
and  all  the  prints,  letters,  furniture,  etc." 

TRADE  GUILDS  AND  TRADE-MARKS 

In  the  German  and  Italian  trade  guilds  of  the  Middle 
Ages,  as  in  France,  the  use  of  marks  was  usually  compul- 
sory; the  member  was  not  only  permitted  but  was  com- 
pelled to  use  his  mark,  so  as  to  strengthen  the  hold  of  the 
guild  upon  the  trade.  Dr.  Kohler  quotes  a  thirteenth 
century  statute  of  Parma  which  is  a  more  compact  and 
adequate  piece  of  legislation  than  the  trade-mark  act  at 
present  in  force  in  the  United  States. 

A  chapter  for  the  protection  of  guilds  and  artisans  in  this  state, 
and  to  prevent  many  frauds  which  are  or  may  be  committed  upon 
them; — that  no  persons  in  the  trade  or  guild  shall  use  the  mark  of 
any  other  person  in  such  trade  or  guild,  nor  place  such  mark,  or  a 
similar  one,  upon  knives  or  swords;  and  if  any  person  in  such  guild 
has  continuously  used  a  mark  upon  knives,  swords  or  other  steel 
or  iron  articles  for  ten  years,  and  any  other  person  is  found  to 
have  used,  within  one  or  two  years,  the  same  mark  or  an  imita- 
tion thereof,  whether  stamped  or  formed  in  any  other  way,  the 
latter  shall  not  in  future  be  allowed  to  use  such  mark  upon  knives, 
swords  or  other  steel  or  iron  articles,  under  penalty  of  ten  pounds 
of  Parma  for  each  and  every  offense,  and  that  regardless  of  any 
compromise  or  award  of  arbitrators  which  may  have  been  made. 
Tenth  session,  1282,  Aug.  28. 

It  is  curious  that  this  statute  contains  a  provision 
which  was  regarded  as  a  dangerous  innovation  when  it 
was  introduced  into  the  English  trade-mark  act  of  1875, 
and  from  there,  in  a  modified  form,  into  the  United  States 
statute  of  February  20,  1905.  This  is  the  so-called  "old 
mark"  section  of  the  English  act  and  the  "ten  year  pro- 
viso" of  our  own,  permitting  the  registration  of  any 
mark,  whatever  its  character,  which  had  been  in  con- 

43 


IDENTIFYING     YOUR     PRODUCT 

tinuous  use  for  a  certain  period  previously  to  the  passage 
of  the  act.  Its  analogue  is  to  be  found  in  the  statute 
of  Parma  in  the  requirement  of  a  continuous  user  for  ten 
years,  and  it  was  doubtless  enacted  for  the  same  reason 
that  similar  provisions  are  found  in  modern  statutes,  that 
it  is  safe  to  assume  that  a  mark  after  a  period  of  ten 
years  continuous  use  serves  to  identify  the  origin  of  the 
goods  to  which  it  is  affixed. 

These  matters  were  regarded  in  much  the  same  way  in 
France,  Italy,  Germany  and  England.  Many  ordinances 
in  regard  to  marks  are  found  in  the  guild  statutes  of 
Liibeck.  In  the  statute  of  the  crossbow  makers  of  1425: 
— "Every  crossbow  maker  shall  place  his  mark  upon  the 
bow  of  each  crossbow  that  he  makes  in  token  that  he  has 
done  and  will  do  his  work  in  a  proper  manner".  The 
guild  statute  of  the  bakers  of  1547  required  them  to 
mark  their  bread  with  a  "sign,  which  shall  continue  to  be 
the  property  of  the  house,  so  long  as  it  is  continued  as  a 
bakery".  This  act  further  provided  for  registration  of 
the  marks  in  a  book  as  public  notice  of  ownership.  This 
statute  clearly  recognizes  the  distinction  between  personal 
and  local  marks  in  the  provision  that  as  the  business  be- 
longs to  the  house  and  is  transferred  with  it,  so  the  mark 
belongs  to  the  business,  and  passes  to  successors.  This 
is  the  present  law  on  the  subject.  In  a  comparatively 
recent  case  the  Supreme  Court  said : 

When  the  trade-mark  is  affixed  to  articles  manufactured  at  a  par- 
ticular establishment  and  acquires  a  special  reputation  in  connection 
with  the  place  of  manufacture,  and  that  establishment  is  transferred 
either  by  contract  or  operation  of  law  to  others,  the  right  to  the  use 
of  the  trade-mark  may  be  lawfully  transferred  with  it.  Its  subsequent 
use  by  the  person  to  whom  the  establishment  is  transferred  is  con- 
sidered as  only  indicating  that  the  goods  to  which  it  is  affixed  are 
manufactured  at  the  same  place  and  are  of  the  same  character  as 
those  to  which  the  mark  was  attached  by  its  original  designer. 

The  ordinances  of  the  City  of  Strassburg  of  1475  con- 
tain the  following:  "Every  weaver  shall  weave  his  mill 
mark  into  his  cloth,  according  to  ancient  custom";  the 
fustian  inspection  ordinances  of  1537,  "No  dyer  shall 
bring  cloth  for  inspection  without  placing  thereon  his 

44 


WHAT     TRADE-MARKS     STAND     FOR 

mark,  under  penalty  of  a  fine  *  *  *  that  it  may 
always  be  known  who  dyed  each  piece" — "whoever  shall 
remove  a  mark  shall  forfeit  the  goods  to  the  city  and 
shall  also  be  punished",  and  the  linsey-woolsey  inspection 
ordinance  of  1616,  "Every  master  who  makes  linsey- 
woolsey  shall  bring  the  same  to  be  inspected,  marked  with 
his  own  mark  and  no  other,  under  penalty  of  a  fine". 

As  a  rule,  a  master,  on  becoming  such,  was  required 
to  choose  a  mark.  This  mark  he  was  obliged  to  use  on 
all  his  goods,  and  to  retain  all  his  life.  The  marking 
of  goods  with  this  mark  was  neither  optional,  nor  a  mere 
right,  but  was  an  obligation  to  his  guild ;  it  was  a  part  of 
his  duty  to  the  community,  demanded  by  the  strict  social 
order  of  the  craft  guilds  of  the  Middle  Ages. 

TRADE-MARKS  AND  HERALDRY 

There  is  a  curious  parallel  between  the  marks  of  ar- 
tisans and  traders  during  the  Middle  Ages,  and  the  her- 
aldic devices  in  use  at  the  same  time.  When  knights 
were  cased  in  plate  and  fought  with  vizors  down, 
features  were  concealed  and  some  method  of  distinguish- 
ing the  individual  in  battle  or  in  the  lists  was  imperative. 
Thus  leaders  for  purposes  of  identification  adopted  char- 
acteristic devices  by  which  they  could  be  recognized. 
These  devices,  originally  badges  of  personal  identification, 
later  became  hereditary.  The  analogy  between  the  her- 
aldic device  as  originally  employed  and  trade-marks  is 
exact.  Both  are  identifying  symbols. 

Just  as  traders  have  controversies  over  the  right  to  use 
particular  trade-marks  and  brands,  the  knights  had  their 
disputes  over  the  right  to  use  their  various  devices.  Ac- 
counts of  cases  of  heraldic  infringement  are  of  frequent 
occurrence  in  the  old  chronicles  and  books  on  heraldry. 
One  of  the  earliest,  that  between  Bryan  de  Fitz  Aleyne 
and  Hue  Poyntz,  is  spoken  of  in  the  roll  of  Caerlavrock. 
The  most  celebrated  is  the  one  which  occurred  in  1384 
between  Sir  Richard  Scrope  of  Bolton  and  Sir  Robert 
Grosvenor,  over  the  right  to  bear  the  arms,  "azure  a  bend 

45 


IDENTIFYING     YOUR     PRODUCT 

or".  This  controversy  might  well  have  been  a  modern 
case  of  trade-mark  infringement  as  far  as  the  method 
of  procedure  is  concerned.  It  was  asserted  by  the  com- 
plainant that  the  use  of  the  device  by  the  defendant 
caused  confusion  and  mistake.  The  parties  appeared  be- 
fore the  Earl  Marshal  and  produced  witnesses  to  prove 
priority  of  use.  Some  of  the  greatest  men  in  England, 
among  them  John  of  Gaunt  and  Geoffrey  Chaucer,  testi- 
fied on  one  side  or  the  other.  The  case  was  decided  in 
favor  of  Scrope  and  Grosvenor  was  enjoined  from  using 
the  device.  This  particular  dispute  has  attracted  more 
attention  than  the  others  on  account  of  Chaucer's  con- 
nection with  it.  In  fact,  about  all  that  is  really  known 
of  the  date  of  Chaucer's  birth  is  derived  from  the  depo- 
sition that  he  gave  in  this  controversy. 

The  danger  resulting  from  confusion  by  the  use  of 
similar  coats  of  arms  was  a  very  real  one.  It  has  been 
said  that  the  battle  of  Barnet  was  lost  because  of  the 
similarity  between  the  royal  device,  a  sun,  and  that  of 
John  de  Vere,  Earl  of  Oxford,  a  star  with  streamers. 
Warwick  charged  Oxford  mistaking  him  for  the  King. 

It  is  curious  that  most  of  the  provisions  of  our  modern 
trade-mark  statutes  and  many  of  the  common  law  rules 
on  the  subject  are  to  be  found  in  surprisingly  similar 
form  in  the  mediaeval  guild  regulations,  municipal  ordi- 
nances and  royal  decrees. 

Lucien-Brun,  a  distinguished  French  writer  on  the 
subject,  in  the  introduction  of  his  book,  comments  on 
the  parallels  between  modern  French  and  mediaeval  law 
and  conditions  as  follows:  "At  any  rate,  during  the 
Middle  Ages,  and  up  to  the  time  of  the  Revolution, 
we  find  that  marks  were  in  general  use,  as  is  proved 
by  Dupinean  in  his  'Customs  of  the  Duchy  of  Anjou* 
(Vol.  II,  p.  805)  ;  and  Braun,  in  his  'Treatise  on 
Trademarks'  (p.  23)  shows  clearly  that  besides  the 
public  mark,  that  is,  the  mark  of  the  trade  or  guild  or 
corporation,  a  sort  of  stamp  of  authenticity,  there  was 
the  private  mark,  the  mark  adopted  by  the  individual 
workman,  to  distinguish  his  products  from  those  of  others 

46 


WHAT     TRADE-MARKS     STAND     FOR 

of  the  same  corporation.  This  was  the  case  not  only  with 
manufacturers,  but  with  merchants,  and  M.  Braun  cites, 
upon  this  point,  commercial  registers  of  Danzig  dating 
from  1420,  and  of  Frankfort,  from  1556,  and  a  work 
by  the  German  jurist,  Gottlieb  Struvius,  entitled  'Systema 
Jurisprudentiae  Opificariae'  (System  of  Industrial  Juris- 
prudence), which  sets  forth  most  of  the  ideas  which  are 
still  in  vogue.  The  general  rules  were  almost  the  same 
then  as  now." 

It  is  certain  that  there  was  no  knowledge  of  these  pro- 
visions on  the  part  of  modern  legislators  and  judges,  and 
their  reappearance  can  only  be  accounted  for  on  the 
theory  that  similar  commercial  conditions  have  necessi- 
tated similar  measures  of  protection. 

MODERN  RELIEF  FROM  INFRINGEMENT 

Trade-mark  recognition  and  protection  in  modern  times 
can  be  said  to  begin  in  England  only  as  late  as  1783. 
And  adequate  relief  against  infringement  was  not  granted 
by  the  English  courts  until  1838. 

There  seems  to  have  been  some  demand  for  protection 
in  the  United  States  at  a  comparatively  early  date. 
Samuel  Breck,  a  sail  cloth  maker  of  Boston  petitioned 
Congress  to  be  allowed  to  register  his  trade-mark.  The 
matter  was  referred  to  Jefferson,  then  secretary  of  state, 
who  reported  as  follows: 

December  9,  1791. 

The  Secretary  of  State,  to  whom  was  referred  by  the  House  of 
Representatives  the  petition  of  Samuel  Breck  and  others,  pro- 
prietors of  a  sail-cloth  manufactory  in  Boston,  praying  that  they 
may  have  the  exclusive  privilege  of  using  particular  marks  for 
designating  the  sail-cloth  of  their  manufactory,  has  had  the  same 
under  consideration  and  thereupon 

Reports,  That  it  would,  in  his  opinion,  contribute  to  fidelity  in 
the  execution  of  manufacturing,  to  secure  to  every  manufactory,  an 
exclusive  right  to  some  mark  on  its  wares,  proper  to  itself. 

That  this  should  be  done  by  general  laws,  extending  equal  rights 
to  every  case  to  which  the  authority  of  the  Legislature  should  be 
competent. 

That  these  cases  are  of  divided  jurisdiction:  Manufactures  made 
and  consumed  within  a  State  being  subject  to  State  legislation,  while 

47 


IDENTIFYING     YOUR     PRODUCT 

those  which  are  exported  to  foreign  nations,  or  to  another  State, 
or  into  the  Indian  territory,  are  alone  within  the  legislation  of  the 
general  government. 

That  it  will,  therefore,  be  reasonable  for  the  general  government  to 
provide  in  this  behalf  by  law  for  those  cases  of  manufacture  generally, 
and  those  only  which  relate  to  commerce  with  foreign  nations,  and 
among  the  several  States,  and  with  the  Indian  tribes. 

And  that  this  may  be  done  by  permitting  the  owner  of  every 
manufactory  to  enter  in  the  record  of  the  court  of  the  district  wherein 
his  manufactory  is,  the  name  with  which  he  chooses  to  mark  or 
designate  his  wares,  and  rendering  it  penal  to  others  to  put  the 
same  mark  on  any  other  wares. 

It  is  evident  that  there  was  not  a  sufficient  demand 
at  the  time  of  Jefferson's  report  or  for  seventy-nine  years 
afterwards  for  a  law  to  put  into  effect  his  recommenda- 
tions and  it  was  not  until  1905  that  they  were  fully  car- 
ried out.  Laws  requiring  the  marking  of  certain  goods, 
as  tobacco,  flour,  and  pork,  before  sale  or  shipment, 
existed  in  the  colonies  and  were  continued  by  the  states 
after  the  adoption  of  the  Constitution,  but  no  state  law 
was  enacted  "to  prevent  fraud  in  the  use  of  false  stamps 
and  labels",  i.  e.,  marks  used  in  trade,  until  1845,  in  New 
York.  State  laws  under  different  titles  but  all  looking 
toward  the  protection  of  the  public  by  means  of  the  regu- 
lation of  marks  on  goods  were  passed  in  Connecticut  in 
1847;  Pennsylvania,  1847;  Massachusetts,  1850;  Ohio, 
1859;  Iowa,  1860;  Michigan,  1863;  Oregon,  1864; 
Nevada,  1865;  Kansas,  1866;  Maine,  1866;  Missouri, 
1866. 

These  were  all  the  state  statutes  on  the  subject  of 
optional  marks  used  in  commerce  within  the  state  making 
the  law  until  the  national  law  of  1870. 

In  the  preface  of  his  Treatise  on  the  law  of  Trade- 
marks (Albany,  N.  Y.,  1860),  Francis  H.  Upton  says 
that  no  other  book  had  previously  been  published  on  the 
subject.  The  next  book  was  Cox's  American  Trade- 
Mark  Cases  (Cincinnati,  1871),  purporting  to  publish 
in  chronological  order  nearly  all  the  trade-mark  cases 
tried  in  this  country  in  the  civil  courts.  The  first  Amer- 
ican trade-mark  case  proper  to  be  reported  was  decided 
in  the  year  1837.  This  was  followed  by  one  case  in  each 

48 


WHAT     TRADE-MARKS     STAND     FOR 

of  the  years  1844,  1846,  1847,  1848,  two  in  the  year 
1849,  one  in  the  year  1850,  one  in  1851,  one  in  1853, 
three  in  1854,  two  in  1855,  three  in  1856,  six  in  1857, 
one  in  1859,  six  in  1860,  one  in  1861,  and  two  in  1862, 
one  in  1863,  and  one  in  1864,  three  in  1865,  seven  in  1867, 
seven  in  1868,  four  in  1869,  and  three  in  1870,  making  a 
total  of  sixty-two,  with  which  were  included  five  others 
about  newspaper  names,  four  about  hotel  names,  and 
others  about  names  of  stores  and  the  like. 

INCREASING  LITIGATION  IN  MODERN  BUSINESS 

It  has  only  been  since  about  1890  that  the  cases  began 
to  be  at  all  numerous.  For  the  last  few  years  the  num- 
ber of  reported  cases  in  this  country  has  been  approxi- 
mately two  hundred  annually.  For  every  case  that  gets 
into  the  books  there  must  be  scores  that  do  not.  No 
account  is  here  taken  of  the  great  number  of  inter- 
ferences, opposition  and  cancellation  proceedings  involv- 
ing trade-marks  in  the  Patent  office. 

The  increase  of  litigation  is  the  result  of  the  increased 
use  of  trade-marks,  brands  and  other  identifying  indicia 
in  present  day  business,  which  is  directly  traceable  to  the 
more  extended  distribution  of  products  and  this  in  turn  is 
either  the  cause  or  the  effect  of  modern  advertising.  The 
greatly  increased  number  of  trade-marks  that  are  regis- 
tered is  significant.  The  first  complete  year  that  the 
Federal  Trade  Mark  Act  of  1870  was  in  operation  there 
were  registered  under  it  in  the  Patent  office  four  hundred 
and  eighty-six  trade-marks ;  during  the  corresponding 
period,  under  the  Act  of  1881,  there  were  nine  hundred 
and  forty-seven  registrations ;  and  under  the  Act  of  1905, 
during  the  first  full  year  of  its  operation  (the  year  1906) 
ten  thousand  five  hundred  and  sixty-eight  trade-marks 
were  registered  and  since  then  to  and  including  1913  there 
have  been  35,792  trade-marks  registered,  the  average 
number  registered  each  year  being  about  5,000.  During 
the  year  1913  there  were  received  by  the  Patent  office 
7,369  applications  for  registration  of  trade-marks,  of 
which  5,065  were  allowed. 

49 


CHAPTER    IV 

WHAT  RIGHTS  A  TRADE 
MARK  GIVES 


WHOEVER  writes  a  book  or  paints  a  picture,  may, 
by  complying  with  certain  formalities  prescribed 
by  statute,  get  a  copyright.  By  this  copyright  the  gov- 
ernment gives  him  for  a  limited  time  the  right  to  exclude 
everyone  from  making  copies  of  his  work. 

A  man  who  first  invents  a  new  machine  may  obtain  a 
patent  on  it.  By  virtue  of  this  he  may  for  seventeen 
years  exclude  every  one  else  from  making,  using  or  sell- 
ing his  machine. 

These  things  are  monopolies  created  by  law.  The  right 
given  in  either  case  is  not  to  make  copies  of  the  book  or 
picture,  or  to  make,  use  or  sell  the  machine.  The  author, 
painter  or  inventor  has  this  right  without  any  law,  copy- 
right or  patent.  The  new  right  is  to  exclude  others. 

The  savage  of  the  paleolithic  age  who  first  discovered 
that  fire  could  be  made  by  rubbing  two  sticks  together, 
made  a  most  valuable  invention.  So  did  the  man  who 
made  the  first  bow  and  arrow.  Neither  of  these  prehis- 
toric geniuses  needed  any  law  to  permit  him  to  keep  on 
rubbing  sticks  and  making  fire  or  to  keep  on  turning  out 
and  using  bows  and  arrows.  Their  difficulty  was  that 
everyone  else  immediately  seized  upon  their  discoveries 
and  the  minute  they  found  out  how  to  do  it,  began 
making  fire  and  bows  and  arrows  for  themselves.  It  has 
been  stated  by  men  whose  opinions  inspire  respect  that 
the  invention  of  making  fire  and  the  invention  of  the  bow 
and  arrow  were  the  inspirations  of  single  individuals  and 

50 


TRADE-MARK     RIGHTS 

that  knowledge  of  these  discoveries  travelled  over  the 
world — that  they  were  not  independently  discovered  by 
different  persons  in  different  localities.  However  interest- 
ing this  speculation  may  be,  the  fact  is  that  the  primitive 
inventor  at  once  found  his  discovery  seized  upon  by  others 
for  their  own  benefit.  The  only  way  he  could  prevent 
this  was  to  keep  his  new  idea  to  himself.  If  everybody 
did  this,  progress  would  be  impossible.  So  taking  a 
casual  jump  from  the  time  of  the  Neanderthal  man  to 
Tudor  and  Stuart  England  we  find  the  government  en- 
couraging people  to  invent  and  discover  new  things,  and 
benefit  the  community  by  making  these  things  known; 
and  in  consideration  of  full  disclosure  guaranteeing  the 
inventor,  not  the  right  to  practice  his  new  invention — he 
always  had  that — but  the  right  for  a  term  of  years  to 
exclude  everyone  else  from  practicing  it.  This  is  the 
only  right  which  a  patent  gives — the  right  of  exclusion. 
This  also  is  the  right  which  copyright  secures. 

The  patentee  or  copyright  proprietor  may  license 
others.  By  so  doing  he  conveys  nothing.  He  does  not 
confer  upon  his  licensee  anything  that  he  does  not  already 
have,  but  the  patentee  agrees  that  he  will  not,  as  against 
him,  exercise  his  right  of  exclusion.  A  license  is  the 
right  not  to  be  sued. 

HOW  TRADE-MARKS  DIFFER  FROM  PATENTS  AND  COPYRIGHTS 

A  trade-mark  is  quite  a  different  thing.  There  is  no 
element  of  monopoly  involved  at  all.  Returning  for  the 
moment  to  our  prehistoric  bow  and  arrow  maker,  the 
minute  his  neighbors  saw  the  device  they  at  once  set  about 
making  bows  and  arrows  for  themselves.  But  the  orig- 
inal inventor  was  a  better  workman  than  his  copyists  and 
made  better  bows  and  arrows.  Those  who  were  unable 
to  make  good  ones  for  themselves  traded  with  him  for 
those  he  made.  He,  having  a  natural  pride  in  his  work, 
painted  or  marked  the  bows  he  fashioned  in  some  way  so 
that  they  would  at  once  be  recognized  as  of  his  make. 
He  had  no  monopoly  in  making  bows  and  arrows.  Every- 

51 


IDENTIFYING     YOUR     PRODUCT 

one  was  doing  it,  but  he  made  better  ones  than  the  others, 
and  he  put  his  mark  upon  them  to  indicate  that  he  made 
them  and  that  therefore  they  were  good. 

A  trade-mark  then  is  not  the  result  of  a  monopoly  but 
quite  the  contrary.  A  trade-mark  precludes  the  idea  of 
monopoly.  It  is  a  means  of  distinguishing  one  product 
from  another;  it  follows  therefore  that  there  must  be 
others  to  distinguish  from.  If  there  are  others  there  is 
no  monopoly,  and  if  there  is  a  monopoly  there  is  no  need 
for  any  distinguishing.  If  all  the  watches  in  the  world 
were  produced  by  one  company  and  could  be  produced 
only  by  it,  there  would  be  no  advantage  in  placing  the 
maker's  name  or  mark  upon  them.  There  would  be  no 
advantage  in  distinguishing  them  from  watches  made  by 
others.  There  would  be  no  others. 

Similarity  of  the  goods  to  be  distinguished  is  presup- 
posed. There  would  be  no  purpose  in  adopting  marks 
to  differentiate  between  sugar  and  coal ;  these  things  are 
sufficiently  wide  apart  to  distinguish  themselves,  without 
any  marks. 

The  fact  that  trade-marks  are  used  indicates  two 
things:  (1)  that  there  is  no  monopoly  in  the  product 
but  that  there  is  competition  actual  or  potential  in  its 
sale;  and  (2)  that  the  man  who  stamps  his  mark  upon 
his  goods  is  not  ashamed  of  them,  but  is  willing  to  let  the 
public  judge  between  his  goods  and  the  similar  goods  of 
his  competitors  by  giving  purchasers  the  means  of  mak- 
ing their  judgment  effective — ability  to  tell  them  apart. 
So  that  if  the  comparison  is  favorable  they  may  choose 
his  goods  again  and  if  unfavorable  they  may  avoid  them. 
A  trade-mark  then  is  only  a  handy  means  of  announcing 
the  make  of  goods  which  others  do  or  may  also  make.  Its 
value  depends  solely  on  the  value  of  this  information  as 
an  influence  on  the  buyer  of  the  goods  enabling  him  to 
make  a  choice, — to  manifest  his  good  will  or  his  ill  will, 
by  buying  or  avoiding  the  product  desired  on  the  one 
hand  or  disliked  on  the  other. 

Most  people  assume  that  a  trade-mark  is  something 
which  is  intrinsically  susceptible  of  ownership,  that  it 

52 


TRADE-MARK     RIGHTS 

exists  as  a  separate  and  independent  thing,  and  that  it 
can  be  valued  in  money — that  a  trade-mark  is  a  piece  of 
wizardry  which  in  some  mysterious  manner  has  created 
a  great  business.  These  notions  are  wholly  erroneous.  A 
trade-mark  in  and  by  itself  is  not  the  subject  of  a  legal 
property  and  has  no  value.  A  name,  symbol  or  device 
as  an  abstract  thing  is  not  capable  of  ownership.  A 
trade-mark  is  not  a  talisman  which  insures  success.  It 
is  rather  the  result  of  success.  If  a  trade-mark  has  value 
it  is  because  it  means  something,  because  it  indicates  to 
the  purchaser  that  certain  goods  have  a  certain  commer- 
cial origin,  and  if  the  fact  of  their  having  this  origin 
makes  them  desirable  and  more  readily  accepted  by  the 
public  than  goods  having  a  different  origin,  then  the 
trade-mark  is  of  value  exactly  as  the  information  it  con- 
veys is  of  value.  It  is  a  sign  that  the  article  to  which 
it  is  applied  is  the  one  which  the  consumer  by  faith  or 
experience  believes  to  be  good,.  It  is  a  name,  symbol 
or  device  which  distinguishes  the  merchandise  of  one  pro- 
ducer from  that  of  others. 

WHEN  A  TRADE-MARK  SERVES  ITS  PURPOSE 

A  trade-mark  to  perform  its  function  of  unmistakably 
identifying  should  not  be  some  microscopic  thing  upon  a 
label,  something  that  must  purposely  be  looked  for  to  be 
seen.  It  should  be  so  obtrusive  that  it  need  not  be  looked 
for  and  cannot  help  being  seen.  It  should  thrust  itself 
upon  the  attention  of  the  observer  in  spite  of  himself.  It 
should  stand  out  like  John  Hancock's  signature  to  the 
Declaration  of  Independence. 

The  value  of  proper  trade-marks  in  modern  business 
is  so  perfectly  obvious  that  it  is  difficult  to  understand 
why  their  use  is  not  universal,  and  why  any  man  who  has 
goods  to  sell  and  is  not  ashamed  of  them,  should  hesitate 
an  instant  in  adopting  a  trade-mark  and  beginning  its 
use,  because  in  no  other  way  can  he  secure  to  himself 
and  perpetuate  the  good  will  of  his  business. 

Ownership  in  a  trade-mark  is  acquired  solely  by  prior- 

53 


IDENTIFYING     YOUR     PRODUCT 

ity  of  adoption  and  continuous  use.  The  right  to  it  does 
not  depend  upon  invention  or  discovery  or  registration, 
but  upon  first  and  continued  use  on  goods  in  the  market, 
with  the  purpose  and  result  of  distinguishing  them  from 
the  similar  productions  of  others. 

There  is  no  end  of  misinformation  among  otherwise 
intelligent  people  as  to  how  the  right  to  a  trade-mark  is 
acquired.  Every  lawyer  of  much  experience  in  trade- 
mark matters  will  instantly  recall  the  client  who  tiptoes 
into  his  office,  closes  the  door  with  an  air  of  mystery  and 
wants  immediate  protection  of  some  name  or  device  he 
has  conceived.  He  says  that  he  wants  it  "copyrighted" 
(this  is  the  expression  generally  used)  or  registered  im- 
mediately, and  before  anyone  can  steal  it.  The  notion 
uppermost  in  his  mind  is  secrecy  and  the  prime  neces- 
sity of  getting  from  some  official  bureau  a  document  with 
a  seal  on  it. 

The  rights  confused  with  the  right  to  a  trade-mark  by 
the  average  business  man  are  patents  and  copyrights. 
These  are  grants  from  the  government  and  have  to  do,  in 
the  case  of  patents,  with  machines  and  compositions  of 
matter  and  the  like  and  in  the  case  of  copyrights  with 
works  of  literature,  art,  music  and  the  drama.  The 
exclusive  right  to  these  things  is  a  monopoly  created  by 
statutory  law,  secured  by  the  compliance  with  certain 
formalities.  A  trade-mark  on  the  other  hand  is  an  indi- 
cation of  the  commercial  origin  of  merchandise,  and  the 
right  to  it  is  not  created  by  any  such  witchcraft.  It  is 
not  a  grant  from  the  government  or  from  a  governmental 
bureau.  It  is  not  dependent  upon  invention  or  discovery, 
or  evidenced  by  imposing  documents  embellished  with  red 
seals  and  red  tape.  It  depends  upon  one  thing  only, 
priority  of  adoption  and  use,  and  continuous  occupancy 
of  the  market  with  goods  bearing  the  mark. 


54 


CHAPTER  V 

DEVISING   AN   EFFECTIVE 
TRADE -MARK 


HUMILIATING  as  the  admission  may  be,  humaiv 
beings  reason  very  little.  We  do  ten  things  from 
habit  where  we  do  one  as  the  result  of  reasoning. 

If  you  have  any  doubt  on  the  subject  read  Professor 
James'  chapter  on  Habit  in  his  Psychology,  or  if  you 
are  of  an  experimental  turn  of  mind,  and  if  in  dressing  in 
the  morning  you  are  in  the  habit  of  putting  your  right 
arm  into  your  coat  sleeve  first,  tomorrow  morning  try 
putting  your  left  arm  in  first  and  see  how  hard  it  is. 

I  have  a  friend  who  became  much  interested  in  the 
"Scientific  Management"  of  which  we  read  so  much  in 
the  magazines.  Applying  the  principles  announced  in  his 
own  daily  life  he  decided  that  he  was  dressing  in  the 
morning  in  a  most  wasteful  and  unscientific  fashion.  He 
arose,  took  a  shower,  put  on  his  underclothes  and  then 
shaved.  To  get  the  lather  off  he  washed  his  face  a  second 
time  (having  washed  it  once  in  the  process  of  bathing) 
with  the  consequent  waste  of  time.  Great  triumph  for 
scientific  management — he  would  shave  first,  then  take  his 
bath  and  dispense  with  the  superfluous  face  washing !  He 
forced  himself  into  the  unaccustomed  routine  for  a  few 
mornings  but  finally  gave  it  up  and  confessed  himself 
completely  beaten,  because  without  a  constant  mental 
effort  he  found  himself  unable  to  break  a  habit  of  twenty 
years  which  coerced  him  into  doing  certain  things  in  a 
certain  order.  So  much  for  the  power  of  habit. 

It  requires  only  a  little  introspection  to  demonstrate 

55 


IDENTIFYING     YOUR     PRODUCT 

the  truth  of  these  assertions.  Their  application  to  sell- 
ing goods  is  obvious.  I  may  think  that  I  have  the  to- 
bacco habit — I  haven't.  I  have  a  brand  habit.  I  do  not 
smoke  cigars  in  general.  I  smoke  one  brand  in  particular 
and  take  any  other  under  protest.  You  in  turn  may 
fancy  you  like  oatmeal.  You  do  not  as  a  matter  of  fact; 
you  like  "Quaker  Oats". 

This  isn't  a  matter  of  reasoning  at  all.  I  know  noth- 
ing at  all  about  the  personality  of  the  maker  of  my  brand 
of  cigars ;  the  chances  are  I  cannot  tell  his  name.  I  don't 
know  how  they  are  made  or  of  what.  You  probably  are 
equally  ignorant  about  all  the  essentials  of  your  oatmeaL 
Reason  has  little  to  do  with  our  preferences.  It  is 
habit  pure  and  simple,  and  it  is  a  brand  habit,  a  trade- 
mark habit  that  we  and  others  like  us  have,  and  that 
habit  is  worth  something  to  the  producer  of  the  goods 
to  whose  use  we  have  become  habituated.  It  eliminates 
competition,  for  to  us  there  is  nothing  "just  as  good". 
His  factory  may  burn  and  he  himself  may  die,  but  the 
demand  for  his  goods  continues  because  locality  and  per- 
sonality have  nothing  to  do  with  it;  it  is  a  trade-mark 
habit  and  habits  are  hard  to  break. 

We  speak  complacently  of  our  "custom"  of  patron- 
izing certain  establishments  or  buying  certain  products, 
implying  something  external  involving  an  act  of  the  will 
and  the  exercise  of  a  rational  choice,  when  as  a  matter  of 
fact  it  is  usually  an  entirely  involuntary  disposition  or 
tendency  to  do  easily,  naturally  and  with  growing  cer- 
tainty what  we  do  often. 

The  producer  of  merchandise  ought  to  take  advantage 
of  this  fact  and  his  efforts  should  be  directed  toward  in- 
ducing the  consuming  public  to  get  the  habit  of  using 
his  goods. 

Of  course,  these  notions  apply  more  distinctly  to  ar- 
ticles of  personal  and  daily  consumption,  but  no  vendible 
commodity  is  unaffected  by  the  force  of  habit;  and  it  all 
depends  upon  trade-marks,  for  in  the  absence  of  an  un- 
mistakable means  of  identification  the  habit  cannot  be 
formed  or  become  fixed. 

56 


DEVISING     AN     EFFECTIVE      MARK 

That  habit  is  an  important  factor  in  economics  has 
long  been  recognized.  In  the  article,  "Custom,"  in  Cal- 
grave's  Dictionary  of  Political  Economy,  is  pointed  out 
that  habit  is,  in  fact,  the  source  of  all  custom.  When  the 
two  are  distinguished,  habit  is  an  unwritten  law  or  tradi- 
tion of  individuals,  custom  is  so  for  society.  Every 
custom  has  thus  begun  in  some  habit;  and  both  custom 
and  habit  have  a  power  analogous  to  vis  inertiae  as  defined 
in  Newton's  First  Law  of  Motion.  Men  continue  in  a  state 
of  rest  or  of  uniform  motion  in  a  straight  line,  except  in 
so  far  as  they  are  led  to  change  that  state  by  force  im- 
pressed on  them. 

POWER  OF  CUSTOM  IN  DETERMINING  GOOD  WILL 

It  is  only  roughly  true  that  men  are  emancipated  from 
custom  in  proportion  to  their  education.  They  are  sel- 
dom removed  by  it  from  the  influence  of  fashion,  which 
is  simply  a  form  of  custom  where  the  capriciousness  of 
the  unwritten  law  is  not  concealed,  and  where  the  matters 
concerned  are  supposed  to  be  beyond  exact  utilitarian 
calculation.  Fashion  often  determines  not  only  what  men 
eat  and  wear,  but  where  they  buy  and  even  to  some  extent 
what  they  pay.  The  good  will  of  a  business  is  simply  this 
fashion  considered  from  the  purveyor's  point  of  view. 

Custom  has  always  been  a  factor  in  fixing  wages,  prices 
and  the  like.  If  prices  are  affected  by  custom,  still  more 
is  the  currency  itself.  Custom  prevents  the  adoption  of 
a  decimal  currency  in  Great  Britain.  No  money  is  cur- 
rency if  it  falls  under  suspicion,  even  groundlessly. 
Money  is  unlike  all  other  tools  in  depending  almost  en- 
tirely on  custom,  instead  of  mechanical  fitness,  for  its 
efficiency.  The  general  outward  character  of  European 
coins  has  accordingly  changed  only  by  a  series  of  varia- 
tions which  were,  each,  very  slight  indeed  at  the  time  of 
their  introduction.  To  be  current,  a  coin  needs  to  have 
a  familiar  look  and  resemble  its  predecessors  in  almost 
all  respects. 

It  is  taken  for  granted  by  economists  that  the  only 

57 


IDENTIFYING     YOUR     PRODUCT 

serious  hindrance  to  perfect  competition,  i.  e.,  the  free 
play  of  individual  self  interest,  is  custom  or  community 
habits,  which,  as  defined  by  Professor  Sidgwick,  is  the 
tendency  to  do  as  one  has  done  before,  and  the  ten- 
dency to  do  as  others  do.  He  says  that  men  continu- 
ally get  less  for  their  money,  goods  or  services  because 
they  exchange  them,  not  in  the  best  market,  but  in  the 
market  they  have  been  used  to  frequent. 

Nichalson  states  that  custom  as  opposed  to  competi- 
tion includes,  in  the  first  place,  the  mere  force  of  habit, 
the  vis  inertiae,  which  is  opposed  to  any  kind  of  change 
simply  because  it  is  a  change.  Habit  of  this  kind  is  one 
of  the  chief  causes  of  inequality  of  wealth;  the  paths  to 
fortune  are  often  made  by  breaking  through  routine. 

HOW  HABIT  AFFECTS  PRICE 

The  influence  of  habit  on  price  is  thus  stated  by  Mr. 
Walker.  Far  beyond  the  range  of  customary  price  is  the 
effect  of  habit  and  mental  inertia,  in  restraining,  or  wholly 
repressing,  the  movements  of  price.  In  the  wider  field 
now  in  contemplation,  buyers  and  sellers  are  left  free,  so 
far  as  outside  influence  is  concerned,  but  are  constrained, 
in  a  higher  or  lower  degree,  by  the  laws  of  their  mental 
constitution.  No  human  being  ever  escapes  from  the 
force  of  habit.  It  is  always  easier  to  do  what  we  have 
done  before  than  to  do  what  we  have  never  done;  to  do 
what  we  have  done  twice  than  what  we  have  done  but 
once;  to  do  what  we  have  done  often  than  what  we  have 
seldom  done. 

Many  economists  have  striven  to  establish  competition 
as  the  scientific  law  of  exchange,  but  their  efforts  as  yet 
have  not  met  with  success.  Mr.  Mill's  confession  that 
competition  is  not  the  ruler  of  retail  trade,  is  decisive  of 
the  fact  that  human  nature  will  not  and  does  not  take  its 
stand  absolutely  on  competition. 

Bonamy  Price  in  his  chapters  on  Practical  Political 
Economy  says  that  men,  in  buying  and  selling,  are  not 
uniformly  governed  by  the  desire  of  making  as  large  a 

58 


DEVISING     AN     EFFECTIVE      MARK 

gain,  or  saving  as  much  money  as  possible,  however  much 
this  principle  is  fondly  laid  down  by  economists,  as  the 
one  foundation  of  their  science.  There  are  indestructible 
elements  in  human  nature  which  come  into  play  here  as 
disturbing  forces.  Men  will  not  uniformly  buy  in  the 
cheapest,  though  they  generally  strive  most  vigorously  to 
sell  in  the  dearest  market.  It  is  not  ignorance  of  political 
economy  which  misleads  them  into  error;  it  is  their  own 
carelessness,  indifference  or  laziness.  Fancy  acts  on  the 
feelings  of  buyers  or  a  long  habit  of  dealing  at  a  particu- 
lar shop,  kindly  feelings  for  a  tradesman,  a  strong  dislike 
for  the  trouble  which  the  pursuit  of  cheapness  imposes. 
Who  has  not  witnessed  the  endless  cases  of  wilful  deter- 
mination  to  persist  in  buying  of  some  particular  dealer, 
though  people  know  perfectly  well  that  he  refuses  to 
come  down  in  his  price  when  the  value  of  his  goods  has 
fallen  in  the  general  market. 

WHEN  A  TRADE-MARK  ESTABLISHES  A  HABIT  OF  BUYING 
IT  BECOMES  AN  ASSET 

All  of  the  foregoing,  which  is  a  free  quotation  from  and 
condensation  of  the  views  of  eminent  economists,  has  a 
direct  bearing  on  business,  good  will  and  trade-mark  prac- 
tice. However  the  original  purchase  may  have  been  in- 
duced, people  continue  to  buy  particular  brands  from 
habit.  The  habit  on  the  part  of  the  public  of  purchasing 
goods  bearing  a  certain  trade-mark  is  an  asset  to  the  pro- 
ducer of  such  goods.  It  represents  the  value  of  the  trade- 
mark by  which  alone  the  habit  becomes  possible  and  is 
perpetuated.  The  psychological  fact  and  economic  factor 
of  habit  in  the  sale  of  goods  should  be  recognized,  culti- 
vated and  exploited. 

It  would  be  well  to  set  out  deliberately  in  devising  a 
label  or  brand  to  get,  if  the  expression  may  be  used,  a 
habit-forming  trade-mark,  and  in  that  way,  to  get  one 
that  will  perpetuate  itself.  In  the  absence  of  a  certain 
means  of  identifying  the  goods,  no  purchaser  can  be  cer- 
tain that  his  second  purchase  is  of  the  same  manufacture 

59 


IDENTIFYING     YOUR     PRODUCT 

as  his  first.  This  is  enough  to  show  the  necessity  of  the 
use  of  trade-marks  or  other  unmistakable  means  of  iden- 
tification, because  the  only  way  any  habit  can  be  acquired 
is  by  constant  repetition  of  the  same  act  until  it  is  done 
without  thought  or  conscious  effort. 

The  kind  of  a  trade-mark  or  identifying  means  to  adopt 
is  a  matter  which  involves  the  consideration  of  many 
obscure  questions.  Ordinarily  the  getting  up  of  a  mark 
or  label  is  more  or  less  fortuitous.  A  manufacturer  de- 
cides that  he  will  advertise  a  certain  product  that  he 
makes.  The  desirability  of  using  a  trade-mark  is  obvious. 
He  goes  to  an  advertising  agency.  Perhaps  he  calls  in  the 
representative  of  a  label  manufacturer  and  the  thing  is 
discussed.  Various  names  are  suggested  and  forms  of 
packages  canvassed.  Then  the  advertising  man  or  the 
label  man  comes  back  with  suggestions,  usually  in  the 
form  of  sketches.  The  manufacturer  or  manufacturer's 
executive  goes  through  the  list  of  names,  and  what  does 
he  do?  He  picks  out  the  one  that  he  individually  likes  the 
best.  The  designs  for  labels,  devices  and  the  like,  are 
taken  up  in  the  same  way.  The  one  that  is  selected  is 
the  one  that  appeals  most  to  the  individual  producer. 

HOW  NOT  TO  DEVISE  A  TRADE-MARK 

It  is  an  everyday  occurrence  that  an  article  is  put  upon 
the  market  under  a  name  and  with  labels  and  brands  in- 
tended to  appeal  to  millions,  which  represent  the  choice 
of  one  individual  or  at  most  a  small  group  of  persons  who 
assume,  and  have  no  reason  in  the  world  for  such  assump- 
tion, that  because  a  particular  get-up  of  package  appeals 
to  them  it  will  appeal  to  the  general  public,  who  are 
expected  to  purchase  the  goods.  Giving  the  general  pub- 
lic credit  for  all  the  virtues  and  intelligence  imaginable, 
assuming  them  to  be  possessed  of  discrimination,  taste 
and  a  desire  to  get  the  most  for  their  money,  is  it  proper 
to  assume  that  any  one  individual  or  any  small  group  of 
individuals  epitomizes  the  likes  and  dislikes  of  the  public 
at  large? 

60 


DEVISING     AN     EFFECTIVE      MARK 

In  discussing  the  adoption  of  a  trade-mark  we  hear  a 
good  deal  about  that  hard-worked  person,  the  "ultimate 
consumer",  and  his  supposed  characteristics.  The  "ulti- 
mate consumer"  is  not  an  imaginary  being,  but  a  flesh 
and  blood  individual  with  certain  virtues  and  failings  and 
with  money  to  spend.  He  is  real  and  not  like  Colonel 
Bogey  or  the  stork.  The  difficulty  is  that  what  he  knows 
and  what  he  likes  are  usually  figured  out  a  priori.  "A" 
guesses  what  "B"  is  thinking  about  or  is  probably  going 
to  think  about.  Now  clairvoyants  are  rare,  and  even  the 
most  competent  seventh  son  of  a  seventh  son  is  likely  to 
go  wrong  when  it  comes  to  telling  what  is  going  on  inside 
another  person's  head. 

We  are  apt  to  conventionalize  the  "ultimate  consumer". 
We  think  we  know  all  about  him  very  much  as  we  know  all 
about  Santa  Glaus.  Everybody  knows  what  Santa  Glaus 
looks  like.  He  is  round  and  fat  and  jolly,  wears  white 
whiskers  and  smokes  a  pipe;  he  has  a  little  round  nose 
and  gibbous  abdomen;  he  wears  a  suit)  of  fur  clothes,  he 
has  a  pack  on  his  back  and  drives  a  team  of  reindeer  with 
bells  on  them  hitched  to  a  sleigh.  There  is  no  mistaking 
him.  We  know  how  he  acts,  too.  He  always  comes 
down  the  chimney  on  Christmas,  after  the  folks  are  abed. 
We  ought  not  to  make  a  Santa  Claus  out  of  that  friend  of 
all  of  us,  the  "ultimate  consumer".  He  is  a  real  person. 
Let  us  look  him  over  as  he  is,  and  the  only  way  to  do  this 
is  to  experiment  with  enough  normal  people  of  the  type 
sought  to  be  reached  to  make  generalizations  safe.  These 
things  ought  not  to  be  decided  by  guesswork,  as  they 
usually  are.  The  only  way  of  telling  whether  any  ma- 
chine is  going  to  work  is  to  try  it.  The  physicist  studies 
the  electrical  phenomena  of  a  thunder-storm  by  tiny 
sparks  from  his  laboratory  apparatus.  He  works  out 
problems  in  wave  motion  by  stirring  up  artificial  waves 
in  a  pool.  The  naval  architect  determines  the  lines  of  a 
great  ship  by  observing  the  behavior  of  paraffin  models 
in  a  tank  of  water.  Why  should  not  similar  experi- 
mental methods  be  employed  in  the  selection  of  a  name  or 
label? 

61 


IDENTIFYING     YOUR     PRODUCT 

Take  the  matter  of  a  name.  Leaving  aside  the  legal 
aspects  of  the  case,  three  things  are  essential.  The  name 
must  be  attractive,  easy  to  recognize  and  recall  and  easy 
to  say  by  the  persons  who  are  expected  to  buy  the  article 
to  which  the  name  is  to  be  applied.  Why  assume  that  a 
name  which  seems  good  to  an  executive  board  or  an  adver- 
tising agency  is  good  in  fact?  Why  not  find  out?  Take 
a  list  of  possible  names  and  submit  it  to  a  considerable 
number  of  people,  both  men  and  women,  and  ask  each  to 
number  the  names  which  to  him  are  most  attractive,  in 
the  order  of  attractiveness.  Repeat  the  experiment 
enough  times  so  that  it  will  be  reasonably  safe  to  gen- 
eralize from  the  result.  Have  the  lists  of  names  returned, 
and  after  a  day  or  so  (approximately  the  interval  which 
may  be  expected  to  elapse  between  actual  purchases  of 
the  goods)  ask  the  persons  to  whom  the  lists  were  sub- 
mitted to  tell  the  names  they  remember  and  see  which 
ones  they  can  repeat  correctly  after  the  interval.  The 
same  experiment  can  be  carried  out  with  the  proposed 
labels.  Find  out  whether  the  observer  is  able  to  tell  after, 
say,  a  week's  interval,  whether  a  particular  package  was 
shown  him  on  the  previous  occasion.  These  things  are 
really  an  application  of  experimental  psychology  to  be 
solved  according  to  modern  laboratory  methods  and  not 
haphazard. 

WHAT  MAKES  A  TRADE-MARK  VALUABLE 

I  think  there  can  be  no  dispute  that  a  trade-mark 
name  should  be  attractive,  easy  to  recognize  and  recall, 
and  easy  to  say.  What  names  are,  in  fact,  attractive, 
easy  to  remember  and  easy  to  say,  is  a  thing  which  may 
very  well  give  rise  to  disputes.  The  psychologists  have 
not  yet  been  able  to  formulate  any  rule  by  means  of 
which  it  can  be  determined  in  advance  what  names  or 
marks  attract  and  please.  I  have  no  doubt,  however,  that 
some  working  hypothesis  will  some  day  be  formulated, 
and  in  the  meantime  careful  experiments  with  identifying 
devices  before  adoption  will  go  a  long  way,  at  least, 

62 


DEVISING     AN     EFFECTIVE      MARK 

toward  helping  to  eliminate  those  which  actually  repel, 
or  are  negative. 

The  artists  have  got  farther  along.  While,  of  course, 
no  set  rule  can  be  laid  down  that  a  picture  containing 
certain  elements  will  invariably  be  pleasing,  Professor 
Miinsterberg  in  his  essay,  "Psychology  and  Art",  has  this 
to  say: 

Think  first  of  the  effects.  Psychology  has  analyzed  the  impressions 
on  our  sense  of  beauty,  and  each  fact  must  express  a  rule  which  can 
be  learned.  Blue  and  red  are  agreeable,  blue  and  green  are  dis- 
agreeable; therefore,  combine  red  and  blue,  but  not  green  and  blue. 
The  golden  section  of  a  line  is  the  most  agreeable  of  all  divisions; 
therefore,  try  to  divide  all  lines,  if  possible,  according  to  this  rule. 
Such  psychological  prescriptions  hold,  of  course,  for  all  arts;  do 
not  make  verses  with  lines  of  ten  feet;  do  not  compose  music  in  a 
scale  of  fifths.  Step  by  step  we  come  to  the  prescription  for  a 
tragedy,  for  a  symphony,  for  a  Renaissance  palace;  how  much  more 
for  the  details  of  a  simple  drawing!  Fill  the  space  thus  and  thus; 
take  care  of  good  balance;  if  there  is  a  long  line  on  one  side,  make 
the  short  line  on  the  other  side  nearer  to  the  center;  these  are 
sesthetical  prescriptions  which  can  be  learned  and  exercised  like  the 
laws  of  perspective  for  architectural  drawing.  Whenever  the  pupil 
follows  the  rules,  his  drawing  will  avoid  disagreeable  shocks  to  the 
spectator. 

It  seems  to  me  that  the  designing  of  a  trade-mark  or 
label  for  attractiveness  presents  precisely  the  problem 
here  outlined,  that  it  is  one  that  can  be  solved,  or  at 
least  simplified  by  experimental  methods.  If  artistic 
prescriptions  worthy  to  be  taught  can  be  deduced  from 
psychology,  why  cannot  a  useful  trade-mark  or  label 
prescription  be  formulated? 

There  should  be  some  rule  that  ought  to  help  in  this 
situation.  There  ought  to  be  some  way  of  telling  in  ad- 
vance, with  reasonable  accuracy,  after  a  sufficient  num- 
ber of  experiments  with  enough  different  people  to  make 
generalization  safe,  whether  a  name,  label  or  package 
is  likely  to  succeed  or  not.  There  ought  to  be  ways  of 
telling,  in  the  same  way,  out  of  a  different  number  of 
names,  marks  and  packages,  which  have  been  by  experi- 
ment demonstrated  to  be  equally  acceptable  to  the  pub- 
lic, which  of  these  several  is  most  easily  impressed  upon 
the  memory  of  the  purchaser  and  most  easily  recognized, 

63 


IDENTIFYING     YOUR     PRODUCT 

retained  and  recalled.  We  all  know  from  personal  ex- 
perience that  some  names  are  easier  to  remember  than 
others;  that  some  faces  or  localities  are  easier  to  recall 
than  others.  We  do  not  know  the  reason  for  it  in  many 
instances,  but  we  appreciate  the  fact.  Every  manufac- 
turer has  had  the  experience  of  selling  the  same  article 
under  different  names  and  labels,  on  the  face  of  things 
equally  attractive,  each  given  the  same  chance  of  suc- 
cess in  advertising  and  distribution,  and  had  one  pack- 
age or  label  succeed  and  others  fail,  for  no  apparent 
reason. 

These  things  have  happened  so  often  and  under  so 
many  different  circumstances  that  it  cannot  be  said  to 
be  the  result  of  chance.  Some  trade-mark  names  succeed 
while  others  equally  euphonious  do  not.  Some  packages 
attract  and  some  do  not  attract,  and  some  actually  repel, 
though  all  are  apparently  equally  attractive  from  an 
artistic  standpoint. 

There  ought  to  be  some  way  of  finding  out  these  things 
beforehand.  The  methods  of  the  psychologists'  labora- 
tories could  very  well  be  applied  to  such  an  important 
question.  Instance  after  instance  can  be  recalled  where 
manufacturers  about  to  put  a  new  brand  upon  the  market, 
where  trade-marks  have  been  selected,  packages  and  labels 
devised,  advertising  copy  prepared,  space  bought,  per- 
haps a  hundred  thousand  dollars  invested  in  the  enter- 
prise, quality  of  the  goods  determined  and  known  to  be 
good  and  no  one  able  to  tell  whether  the  public  would 
take  to  it  or  not.  In  no  other  business,  where  the  same 
amount  of  money  is  going  to  be  invested,  are  such  chances 
taken. 

Someone  who  is  a  psychologist  and  wishes  to  demon- 
strate that  a  science  which  most  people  regard  as  sterile 
and  barren  has  a  real  application  to  everyday  problems, 
should  be  able  to  answer  the  question  here  suggested. 


CHAPTER  VI 


QUESTIONS  of  infringement  of  trade-marks  are 
always  approached  by  the  courts  from  the  side  of 
the  ordinary  purchaser.  The  rule  of  law  is  that  one  mark, 
name  or  device  infringes  another  if  there  is  a  sufficient 
resemblance  to  make  it  probable  that  ordinary  people 
using  the  degree  of  care  that  such  persons  usually  do  in 
purchasing  commodities  like  those  before  the  court  would 
be  deceived  and  buy  one  article  thinking  it  to  be  the  other. 
It  is  not  the  careful  person  with  his  wits  about  him,  the 
expert  or  the  cautious  who  is  considered,  but  the  ordinary 
everyday  unwary  buyer. 

An  intelligent  answer  to  the  question,  "Is  the  defend- 
ant's mark  in  any  particular  case  within  the  rule?"  can 
only  be  given  after  a  careful  investigation  of  the  charac- 
teristics, habits  and  mental  make-up  of  purchasers  of 
very  many  different  kinds  of  articles. 

Take  a  case  involving  the  alleged  infringement  of  tin 
tags  on  plug  tobacco.  The  court  is  asked  by  the  com- 
plainant to  say  that  the  resemblance  is  close  enough  as 
to  be  likely  to  deceive  the  ordinary  buyer  of  plug  tobacco. 
The  defendant  always  argues  there  is  no  such  resem- 
blance, and  since  few  infringers  have  the  hardihood  to 
make  a  Chinese  copy  of  a  rival's  mark,  there  is  usually 
room  for  an  argument  and  such  differences  as  do  exist 
are  made  the  most  of.  The  judge  must,  as  nearly  as  he 
can,  put  himself  in  the  shoes  of  the  ordinary  consumer 
of  plug  and  decide  whether  or  not  the  marks  are  enough 

65 


IDENTIFYING     YOUR     PRODUCT 

alike  to  fool  him.  It  behooves  counsel  on  either  side  of 
such  a  case  to  know  what  sort  of  people  buy  his  client's 
goods;  how  intelligent  they  are,  how  careful,  and  what 
are  their  habits  and  characteristics.  In  short,  before  he 
can  rationally  argue  to  a  court  that  a  given  mark,  name 
or  device  is  or  is  not  likely  to  deceive  an  ordinary  pur- 
chaser, he  must,  or  should,  know  himself  and  at  first  hand 
what  sort  of  a  person  the  ordinary  purchaser  is  and  how 
he  behaves. 

If  an  argument  in  a  trade-mark  or  unfair  trade  case 
is  ever  to  become  more  than  a  discussion  of  mere  abstrac- 
tions, like  the  disputations  of  the  mediaeval  churchmen 
concerning  the  number  of  angels  who  could  stand  on  the 
point  of  a  needle,  the  ordinary  purchaser,  who  is  the  real 
party  complainant  in  every  infringement  case,  ought  to 
be  studied  at  first  hand  by  the  counsel  in  the  case  who  is 
expected  to  look  after  his  rights. 

CARELESSNESS  IS  CHARACTERISTIC  OF  THE  ORDINARY  PURCHASER 

For  many  years  I  have  followed  the  trail  of  the  or- 
dinary purchaser.  In  cases  involving  Pillsbury's  Best 
and  Washburn-Crosby's  Gold  Medal  brands  I  have 
haunted  grocery  stores  and  watched  him  (or  usually  her) 
buy  flour.  I  have  stood  by  the  hour  in  jewelry  stores  to 
see  how  people  ask  for  and  identify  Big  Ben  clocks,  in 
general  stores  in  the  South  and  watched  men  buy 
Schnapps  Plug  or  Lorillard's  Good  Smoke, — in  the  North, 
Union  Leader  and  Tuxedo  cut  plug,  Pall  Mall  cigar- 
ettes and  Manuel  Garcia  cigars.  I  have  studied  the 
buyers  of  dozens  of  other  articles,  Fairbank's  scales, 
Quaker  Oats,  Baker's  Cocoa,  Ingersoll  watches,  Hole- 
proof  hosiery,  Paine's  Celery  Compound,  Coca-Cola,  Cas- 
carets  and  so  on.  It  is  an  exceedingly  interesting  study 
as  a  matter  of  human  nature  and  practical  psychology, 
and  a  useful  thing  in  examining  and  cross-examining 
trade  witnesses  and  participating  in  cases  concerning  the 
products. 

This  observation  and  study  of  the  ordinary  purchaser 

66 


A     STUDY     OF     THE     CONSUMER 

extending  over  a  period  of  nearly  twenty  years  have  given 
me  certain  general  notions  on  the  subject  of  what  trade- 
marks, labels  and  packages  are  best  recognized  and  re- 
called. These  notions  may  be  all  wrong,  and  I  offer  them 
with  considerable  trepidation. 

In  the  first  place,  the  ordinary  purchaser  is  less  well 
informed  than  we  think  he  is ;  he  is  inattentive,  indiffer- 
ent and  careless ;  he  does  not  keep  in  mind  the  details  of 
packages  and  labels,  infrequently  examines  with  care  what 
is  offered  to  him;  he  seldom  reads  labels;  he  pays  little 
attention  to  names  of  manufacturers,  and,  as  a  matter  of 
fact,  in  nine  cases  out  of  ten  does  not  know  who  makes 
the  goods  he  is  in  the  habit  of  buying. 

OFTEN  THE  DEALER  DOES  NOT  KNOW  WHO  MAKES  HIS  GOODS 

It  is  astonishing  how  little  dealers  know  about  these 
things.  In  a  recent  case,  the  subject  matter  of  which 
was  the  brand,  "Mother's,"  a  number  of  trade  witnesses, 
all  grocers,  were  called.  One  testified  that  he  had  dealt 
in  "Mother's"  brand  of  canned  tomatoes  for  several  years. 
He  was  asked  to  give  the  name  of  the  producer,  but  was 
unable  to  do  so.  One  man,  who  had  been  in  business  forty 
years,  swore  that  "Mother's  Oats"  were  made  by  The 
Mother's  Oats  Company.  Another  testified  that  he  had 
dealt  in  "Mother's"  gelatine  and  had  it  in  stock  in  his 
store  when  he  was  testifying,  but  could  not  tell  who  made 
it  and  would  not  even  hazard  a  guess.  One  witness  insisted 
that  an  article  dealt  in  by  him  and  which,  as  a  matter  of 
fact,  was  made  by  the  party  on  whose  behalf  he  was  tes- 
tifying and  was  directly  involved  in  the  controversy,  was 
made  by  another  establishment.  The  foregoing  is  a 
truthful  statement  of  sworn  testimony  taken  within  the 
last  year  in  a  pending  case.  The  men  testifying  were 
intelligent,  prosperous  retail  grocers  and  much  better 
informed  on  such  things  than  the  average  consumer. 

If  the  dealer  does  not  know  who  produces  the  goods 
he  sells,  the  consumer  can  hardly  be  expected  to.  The 
situation  here  disclosed  is  typical  and  by  no  means  excep- 

67 


IDENTIFYING     YOUR     PRODUCT 

tional.  It  has  come  under  my  observation  so  repeatedly 
that  I  have  accepted  it  as  a  matter  of  course. 

One  would  naturally  suppose  that  after  a  century's 
constant  advertisement  and  use,  housewives  would  know 
that  Baker's  cocoa  and  chocolate  are  made  by  Walter 
Baker  &  Co.,  Ltd.,  of  Dorchester,  Mass.  I  had  occasion 
recently  to  go  through  a  record  of  testimony  in  an  unfair 
trade  case  over  the  use  of  the  surname  Baker  by  another 
and  much  more  recently  established  concern.  The  depo- 
sitions of  a  very  large  number  of  women  were  taken.  An 
analysis  disclosed  that  many  of  them  asked  for  the  prod- 
uct as  Baker's  cocoa  and  Baker's  chocolate;  that  the 
name  Walter  Baker  &  Co.  was  not  used  and  is  seldom 
known;  that  a  large  number  of  purchasers  did  not  know 
whether  the  name  was  Walter  Baker,  William  Baker  or 
what  it  was;  the  location  of  the  place  of  business  of  the 
producer  was  not  known.  A  large  number  said  it  was 
in  the  East,  "somewhere".  Some  few  knew  Dorchester, 
Mass. ;  others  said  New  York.  Many  said  they  did  not 
know.  A  considerable  proportion  of  purchasers  desig- 
nated the  product  as  "the  chocolate  with  the  girl  on  it"i 
'Some  said,  "The  chocolate  with  the  lady".  Some  called 
the  picture  "the  Quaker  girl  or  the  Quaker  lady";  some, 
"the  picture  in  Colonial  costume";  "the  picture  with  the 
tray  and  cups";  "the  little  chocolate  woman";  "I  can't 
just  describe  it,  only  the  picture  is  on  it  of  a  Quaker 
lady" ;  "there  is  a  lady  on  the  back" ;  "it  is  the  one  with 
the  yellow  label  and  a  German  lady  on  the  wrapper" ;  "I 
don't  know  how  she  is  dressed,  shawl  around  her  shoul- 
ders"; "the  one  with  the  woman  on  it";  "a  little  Dutch 
girl  on  the  back" ;  "Puritan  figure  on  the  back" ;  "on  the 
back  of  it  is  generally  a  little  piece  of  paper  with  a  lady 
on  it";  "I  thought  it  was  a  woman  with  a  red  kimono". 

Anyone  who  will  indulge  in  a  little  introspection  will 
admit  that  this  is  typical.  Suppose,  for  a  moment,  you 
smoke  Carolina  or  Romeo  and  Juliet  cigars — what  is  the 
maker's  name?  Try  to  visualize  or  describe  the  label. 
[Who  makes  the  Boston  or  the  Paris  garter? 

The  ordinary  person  has  as  much  difficulty  in  remem- 


A     STUDY     OF     THE     CONSUMER 

bering  the  names  of  brands  as  the  names  of  persons.  The 
name  of  the  article  is  easy  enough — that  is  a  part  of  the 
language,  but  the  brand  name  is  like  the  name  of  an  indi- 
vidual. Brand  names  are  much  more  easily  remembered 
when  they  are  helped  by  pictures  which  suggest  the  name, 
and  pictures  and  peculiarities  of  package  are  better  re- 
membered and  described  than  are  names  recalled.  In  the 
Baker  case,  just  referred  to,  and  in  others  concerning 
the  same  product,  it  appeared  that  over  twenty-five  per 
cent  of  the  women  who  testified  did  not  use  the  name 
Baker  at  all  in  ordering,  but  designated  the  product  de- 
sired as  "the  chocolate  with  the  girl" ;  "the  chocolate  with 
the  lady"  or  "the  chocolate  with  the  Quaker  lady",  "with 
the  Dutch  lady",  "with  the  Puritan  girl",  or  in  some  sim- 
ilar fashion. 

WHY  PICTURES  ARE  VALUABLE  AS  LABELS 

It  is  the  universal  human  trait  to  remember  pictures 
better  than  names  —  picture  writing  and  ideographic 
writing  were  in  use  long  before  alphabets  were  invented. 
"Your  face  is  familiar,  but  I  can't  recall  your  name,"  is 
so  commonplace  that  it  has  ceased  to  be  an  insult,  and 
yet  all  faces  bear  more  resemblance  to  one  another  than 
most  names.  It  seems  to  me,  therefore,  that  there  ought 
to  be  an  easily  recognized  picture  where  possible  on  every 
label.  It  ought,  too,  to  represent  something  with  which 
the  ordinary  person  is  familiar,  so  as  at  once  to  be  rec- 
ognized as  something  known  and  within  everybody's  ex- 
perience. Pictures  are  a  universal  language,  understood 
by  all  people.  A  dog's  head  is  a  dog's  head,  whether  a 
person  speaks  English  or  Hindustani.  If  possible,  the 
picture  should  suggest  the  name,  or  better  still,  should  be 
the  name  expressed  pictorially.  The  label  or  package 
then  shows  the  same  thing  twice  —  in  two  languages  — 
appeals  to  two  senses  —  sight  as  well  as  hearing  —  to  the 
illiterate  as  well  as  the  literate  observer,  and  it  has  the 
added  force  of  repetition.  It  is  easier  for  most  people 
to  describe  things  than  to  name  them.  We  all  identify 


IDENTIFYING     YOUR     PRODUCT 

people  more  easily  by  some  physical  characteristic  than 
by  name,  and  we  can  usually  tell  whether  we  have  seen  a 
person  before,  though  we  may  never  know  his  name. 

The  same  applies  to  packages  of  goods — it  is  easier 
for  people  to  ask  for  the  macaroni  in  the  yellow  package 
with  the  red  band  around  it  than  it  is  for  them  to  say 
the  name,  Fould's.  Pabst  Blue  Ribbon  beer  is  an  illus- 
tration. Captain  Pabst  was  a  horse  and  stock  fancier. 
The  brewery  put  a  particular  brew  of  fine,  light  beer 
upon  the  market  in  an  attractive  package  under  the  name 
"Select".  As  an  ornament  and  additional  badge  of  iden- 
tification a  strip  of  blue  ribbon  was  tied  about  the  neck 
of  the  bottle,  very  much  as  similar  ribbons  are  fastened 
to  prize-winning  cattle  and  horses.  It  was  an  attractive 
thing  and  whatever  suggestion  it  conveyed  was  in  the 
right  direction.  The  name  on  the  label  was  "Select"  and 
the  words,  Blue  Ribbon,  nowhere  appeared  upon  the  pack- 
age. The  public  immediately  began  to  order  and  ask  for 
the  beer  as  "Blue  Ribbon  beer".  The  word  "Select"  was 
seldom  or  never  used  by  consumers  or  dealers.  If  the 
beer  was  designated  by  the  name  "Select",  which  was  on 
the  label,  in  shipping  to  buyers,  objection  was  made  at 
once  and  letters  were  received  protesting  that  what  was 
wanted  was  not  "Select"  but  "Blue  Ribbon"  beer.  Finally, 
out  of  regard  for  the  universal  public  acceptation  of 
"Blue  Ribbon"  as  the  name  of  the  beer,  the  word  "Select" 
was  dropped  from  the  label  and  "Blue  Ribbon"  placed 
there  instead. 

A  few  years  after  this  change  was  made,  in  the  course 
of  a  lawsuit  with  another  brewery  over  the  alleged  infring- 
ing use  of  the  name  "Blue  Ribbon"  by  it  on  beer  of  its 
production,  a  large  number  of  liquor  dealers,  saloon  keep- 
ers, bartenders  and  consumers  of  beer  were  examined  as 
witnesses  for  the  purpose  of  showing  that  the  name  "Blue 
Ribbon"  was  the  recognized  public  designation  of  this 
particular  variety  of  Pabst's  beer.  These  men  had  han- 
dled, dealt  in  and  used  the  beer  daily  from  the  very  begin- 
ning. Out  of  several  hundred  not  more  than  a  dozen 
remembered  the  name  "Select".  Many  swore  that  that 

70 


A     STUDY     OF     THE     CONSUMER 

word  had  never  appeared  on  the  label,  but  that  "Blue 
Ribbon"  always  had  been  there  and  that  there  never  had 
been  any  change  in  this  respect.  I  recall  one  choleric 
German  saloon  keeper,  who  wanted  to  fight  counsel  who 
was  cross-examining  him  about  the  name  "Select"  on  the 
labels.  He  said  the  name  never  was  there  at  any  time  and 
that  the  lawyer  was  trying,  as  he  expressed  it,  "to  ball 
him  up  and  make  an  esel  out  of  him".  In  all  of  the  testi- 
mony taken  not  one  witness  was  at  all  uncertain  about 
the  blue  ribbon  tied  to  the  neck  of  the  bottle — they  all 
remembered  that — just  as  in  the  Baker  cases  all  the  wit- 
nesses knew  the  chocolate  girl  and  some  knew  no  other 
identifying  element. 

These  instances  are  examples  merely  and  are  so  typical 
that  it  seems  clear  that  pictures  or  conspicuous  physical 
characters  are  more  easily  recognized  and  recalled  than 
names. 

But,  of  course,  people  must  have  something  to  ask  for. 
If  they  have  a  picture  that  suggests  a  name  or  a  physical 
characteristic  that  they  can  describe,  the  name  problem 
is  solved.  "Blue  Ribbon  Beer,"  "Dog's  Head  Ale," 
"Quaker  Oats"  and  the  like,  illustrate  this.  When  the 
picture  or  characteristic  is  described,  the  name  is  spoken. 
One  mental  operation  on  the  part  of  the  buyer  is  all  that 
is  necessary.  There  is  no  need  of  a  double  effort  on 
the  part  of  the  consumer  to  remember  name  and  device 
and  which  name  goes  with  which  device,  and  connect  two 
variant  elements ;  and  the  consequent  liability  of  getting 
mixed  up  is  avoided. 

WHAT  MAKES  A  GOOD  TRADE  NAME 

The  name  selected  ought  to  be  simple,  short  and  easy 
to  say,  and  to  pronounce.  From  some  points  of  view 
coined  words  have  advantages,  but  the  practical  difficulty 
with  them  is  that  the  person  who  adopts  such  a  word  as 
his  trade-mark  has  three  difficult  things  to  do.  He  must 
add  a  word,  hitherto  unknown,  to  the  language ;  he  must 
teach  indifferent  people  what  it  means,  and  he  must  in- 

71 


IDENTIFYING     YOUR     PRODUCT 

duce  them  to  use  it  in  their  daily  speech.  I  refer  here  to 
words  which  are  really  invented,  like  Kodak,  and  not  the 
feeble  attempts  so  often  met  of  taking  a  descriptive  term 
and,  by  misspelling  or  in  some  other  witless  fashion  of 
assuming,  to  give  it  an  arbitrary  character.  Such  names 
are  the  blank  checks  of  intellectual  bankruptcy.  Coined 
words  being  unfamiliar,  are  difficult  to  pronounce  and 
people  hesitate  to  make  the  attempt  for  fear  of  ridicule. 

I  recall  one  woman,  who  was  a  witness  in  a  case  involv- 
ing a  food  product  sold  under  a  most  euphonious  invented 
title,  who  testified,  when  asked  how  she  identified  the 
article,  "I  usually  point  to  it  when  I  can  see  it ;  if  I  can't 
see  it  I  don't  buy  it;  I'm  not  sure  how  to  pronounce  the 
name,  so  I  never  try.  I'm  always  afraid  I'll  get  it  wrong 
and  the  grocer  will  think  I'm  a  fool."  In  this  particular 
case  this  drawback  was  so  serious  and  so  many  complaints 
were  heard  that  the  name  was  changed  to  one  less  difficult. 

Even  names  so  simple  that  it  seems  almost  impossible 
that  they  can  be  mispronounced  sometimes  are  mangled 
almost  beyond  recognition.  I  was  haunting  drug  stores 
several  years  ago  to  satisfy  myself  as  to  the  extent  that 
purchasers  askec  for  Cascarets,  using  the  words  "Candy 
Cathartic".  A  woman  came  in  and  asked  for  a  bottle  of 
"Scodliver  Oil".  The  druggist  produced  a  bottle  of  or- 
dinary cod  liver  oil.  The  woman  declared  that  that  was 
not  what  she  wanted,  she  wanted  "Scodliver  oil",  and 
accused  the  druggist  of  substituting.  A  good  deal  of 
cross-questioning  disclosed  that  what  the  woman  wanted 
was  "Scott's  Emulsion". 

VALUE  LIES  IN  A  TRADE-MARK  THAT  IS  SIMPLE 
AND  EASY  TO  REMEMBER 

A  trade-mark  name  ought,  if  possible,  to  be  a  word 
that  people  are  familiar  with  and  an  easy  word,  not  a 
hard  one  out  of  the  back  of  the  book;  then  the  man  who 
wants  to  identify  such  a  word  with  his  goods  has  only  one 
thing  to  do — associate  it  with  the  article  or  the  package ; 
he  has  only  to  give  a  new  association  and  meaning  to  an 

72 


A     STUDY     OF     THE     CONSUMER 

old  word, — he  does  not  have  to  teach  people  a  new  lan- 
guage and  compel  them  to  speak  it.  Everybody  knows 
the  words  "Gold  Dust",  "Ivory",  etc.  They  do  not  have 
to  be  learned.  The  public  must  only  be  educated  to  asso- 
ciate them  with  certain  merchandise  —  a  much  simpler 
thing  than  to  teach  them  that  there  is  a  word  spelled 
"cepalogine",  and  that  it  is  pronounced  in  a  certain  way 
and  is  a  headache  remedy. 

Trade-marks  and  labels  should  be  simple.  People  can- 
not and  will  not  get  and  keep  complicated  impressions. 
It  is  a  fact  that  the  ordinary  person  can  only  see  at 
one  time  three  or  four  words  in  a  printed  line.  Most 
labels  are  too  elaborate  and  have  too  much  on  them.  In 
the  effort  to  have  a  large  number  of  distinctive  elements 
the  effect  of  each  is  destroyed  and  no  distinct  impression 
is  made.  It  is  much  better  to  have  a  few  things  on  the 
label,  the  fewer  the  better,  and  have  each  stand  out  like 
a  lighthouse  —  a  very  few  good  strong  colors  and  no 
superfluous  ornamentation  and  printed  matter.  Then  the 
impression  created  is  instant,  distinct  and  will  last.  A 
multiplicity  of  separate  elements  creates  a  multiplicity  of 
impressions,  the  strength  of  each  in  inverse  ratio  to  the 
number.  One  good  strong  one  concentrated  on  one  thing 
is  far  better  than  ten  scattered  among  ten  different  things. 

Modern  label  designers  could  well  emulate  the  almost 
brutal  simplicity  of  the  paleolithic  artists  who  decorated, 
with  pictures  of  animals,  the  caves  of  Altamira.  These 
pictures  once  seen  are  not  soon  forgotten,  while  a  man 
may  walk  miles  in  a  modern  gallery  and  be  sure  of  noth- 
ing except  that  he  has  seen  some  pretty  pictures. 


CHAPTER  VII 

MAKING  A  TRADE -MARK 
LEGALLY  SOUND 


I  HAVE  tried  in  previous  chapters  to  express  my  per- 
sonal views  concerning  the  kind  of  trade-marks  which 
are  most  easily  recognized  and  recalled  by  the  ordinary 
consumer.  I  concede  that  this  is  a  matter  on  which  there 
may  very  well  be  differences  of  opinion.  Everyone,  how- 
ever, will,  I  think,  agree  that  a  trade-mark  should  be  at- 
tractive and  easy  to  recognize  and  to  recall.  The  at- 
tractiveness helps  to  sell  the  first  package.  The  quality 
of  the  product  plus  a  ready  means  of  identifying  it  sells 
the  second  and  assures  the  purchaser  that  the  same 
article  which  has  pleased  before  is  again  being  bought. 
Hence,  the  identity  between  the  second  and  the  first  must 
be  assured  and  the  unmistakable  means  of  giving  this  as- 
surance are  the  identifying  elements  on  the  package.  That 
these  elements  may  perform  their  functions,  it  is  essen- 
tial that  they  be  such  that  they  can  be  recognized  after 
the  interval  between  successive  purchases  and  recalled 
without  serious  mental  effort.  It  seems  to  me,  therefore, 
that  this  generalization  is  safe. 

It  is  not  difficult  to  agree  on  generalization?,  but  when 
it  comes  to  specific  instances,  there  is  always  room  for 
differences  of  opinion.  In  the  present  case,  what  is  at- 
tractive is  a  matter  of  taste,  and  tastes  seem  to  differ 
widely.  What  is  easy  to  recognize  and  recall  is,  or  should 
be,  a  matter  of  experiment,  but  experiments  are  not 
usually  made  and  in  their  absence  individual  opinions 
vary  just  as  they  always  vary  when  there  is  no  common 

74 


LEGALLY      SOUND      MARKS 

basis.  The  attractiveness  of  a  trade-mark  and  its  capac- 
ity for  being  recognized  and  recalled  are  both,  in  my  own 
opinion,  simple  problems  in  experimental  psychology  and 
should  be  so  considered.  They  are  not  matters  of  hap- 
hazard choice,  inspiration  or  accident. 

In  addition  to  these  problems,  which  I  think  are  really 
scientific  and  not  empirical,  there  are  others  quite  as  im- 
portant and  quite  as  frequently  ignored.  The  first  and 
most  important  of  these  is — is  the  trade-mark  one  which 
the  law  will  protect? 

It  may  be  well  to  have  clearly  in  mind  exactly  what  a 
trade-mark  is.  The  Supreme  Court  in  a  number  of  cases 
has  adopted  a  definition.  "A  trade-mark,"  it  has  said, 
"is  a  word,  letter,  device  or  symbol  or  some  combination 
of  these  used  in  connection  with  an  article,  and  either 
inherently  or  by  association  pointing  distinctly  to  the 
origin  or  ownership  of  the  article  to  which  it  is  applied." 
The  word  "distinctly"  in  this  definition  is  not  to  be  over- 
looked. To  be  a  trade-mark,  the  name  or  device  must 
indicate  distinctly  the  commercial  origin  of  the  goods, 
otherwise,  of  course,  the  use  by  another  would  not  involve 
a  false  representation  in  this  respect.  The  public  would 
not  be  deceived  by  it  and  no  one  would  be  injured. 

The  failure  to  observe  the  significance  of  the  word 
distinctly  and  the  importance  of  this  requirement  are 
responsible  for  a  good  share  of  the  litigation  over  trade- 
marks, most  of  the  substitution  that  is  practiced  and  a 
good  share  of  the  piracy  that  goes  on. 

The  ordinary  man  in  buying  a  piece  of  real  estate  has 
his  abstract  examined  so  as  to  be  sure  that  he  will  really 
own  what  he  is  paying  for.  A  man  who  buys  a  bond 
wants  to  know  something  about  the  assets  by  which  it 
is  secured.  If  he  buys  a  share  of  stock  in  a  corporation 
he  wants  to  know  something  about  the  company  issuing 
the  stock.  In  short,  in  the  ordinary  affairs  of  life  the 
average  business  man  takes  reasonable  precautions,  but 
when  it  comes  to  adopting  a  trade-mark,  which  involves 
commonly  an  expenditure  of  large  sums  of  money,  he 
stakes  his  reputation  and  the  reputation  of  his  business 

75 


IDENTIFYING     YOUR     PRODUCT 

upon  something  which  he  may  own  and  he  may  not — 
which  may  be  his  exclusive  property  and  which  he  may 
have  to  share  with  every  conscienceless  parasite  with  more 
covetousness  than  decency.  He  ought,  therefore,  to  exer- 
cise the  same  precaution  in  the  adoption  of  a  trade-mark 
that  he  does  in  the  acquisition  of  any  other  property  and 
be  sure  that  he  can  be  protected  in  its  exclusive  use.  Re- 
calling again  that  to  be  a  trade-mark  the  name  or  device 
must  indicate  distinctly  the  commercial  origin  of  the 
article,  it  is  well  to  bear  in  mind  a  few  don'ts.  When 
it  comes  to  choosing  a  trade-mark  (1)  don't  select  a 
personal  name;  (2)  don't  select  a  geographical  name; 
(3)  don't  select  a  descriptive  name;  (4)  don't  select  a 
deceptive  name;  (5)  don't  select  an  infringing  name; 
(6)  don't  be  commonplace.  Recollecting  that  a  trade- 
mark to  be  such,  must  point  distinctly  to  the  origin, 
with  a  certain  institution,  of  the  product  to  which  it  is 
affixed,  it  is  obvious  that  names  or  devices  of  the  char- 
acter above  enumerated  lack  this  quality  of  distinctive- 
ness. 

DON'T  SELECT  A  PERSONAL  NAME 

While  it  would  seem,  as  a  matter  of  first  impression, 
that  a  man's  own  name  is  about  as  distinctive  a  thing  as 
it  is  possible  to  use  to  indicate  that  the  merchandise  to 
which  it  is  affixed  emanates  from  him,  a  little  reflection 
will  demonstrate  that  this  is  not  so.  It  may  be  true 
enough  that  among  John  Smith's  own  circle  of  friends 
or  in  a  larger  way  in  the  town  or  village  in  which  he 
lives,  the  name  "John  Smith's  Razors"  means  a  partic- 
ular article  made  or  sold  by  a  particular  individual,  but 
over  a  greater  area  the  name  "John  Smith's  Razors" 
means  a  razor  made  by  a  man  named  John  Smith.  John 
Smiths  are  legion  and  every  one  of  them  has  the  right  to 
use  his  own  name  in  his  own  business,  and  the  fact  that 
there  may  be  another  John  Smith  who  has  previously 
acquired  a  reputation  under  that  name  in  the  same  busi- 
ness is  no  reason  for  denying  the  natural  right  of  the 

76 


LEGALLY     SOUND      MARKS 

second  to  use  his  own  name.  He  has  that  right.  It 
cannot  be  taken  from  him.  He  has,  in  the  absence  of 
actual  fraud,  contract  or  estoppel,  as  good  a  right  to  use 
his  name  as  any  one  else  of  the  same  name.  The  mere 
fact  that  the  illustration  here  given  is  of  a  name  which 
is  generally  accepted  as  the  conversational  equivalent  of 
the  legal  John  Doe,  makes  no  difference.  Even  the  most 
uncommon  names  are  borne  by  more  than  one.  There 
have  been  late  arriving  men  of  the  name  of  Anargyros 
and  Melachrino  in  the  cigarette  business,  spurious  Pills- 
burys  in  the  flour  business,  personally  real  though  com- 
mercially deceptive  Fownes  in  the  glove  business.  The 
Rogers  who  have  been  minded  to  go  into  the  silver-plate 
business  are  legion,  Tussauds  in  wax  works,  and  so  on. 
The  adoption  of  a  personal  name  as  a  trade-mark  is  an 
invitation  to  every  one  who  may  bear  that  name  to  em- 
bark in  a  similar  line  of  business  as  soon  as  it  is  com- 
mercially worth  his  while,  and.  thus  to  divert  to  himself  a 
portion  of  the  original  trader's  customers  and  trade. 
However  pleasing  it  may  be  to  see  one's  own  name 
placarded  in  advertisements  and  used  on  packages,  legally 
it  is  a  mistake  to  let  vanity  or  any  other  consideration 
stand  in  the  way  of  protection.  While  the  courts  have 
stopped  and  will  doubtless  continue  to  stop  piracy  by 
means  of  the  deceptive  use  of  personal  names,  the  relief 
accorded  is  never  complete  and  the  infringer  always  gets 
away  with  some  of  the  loot. 

DON'T  SELECT  A  GEOGRAPHICAL  NAME 

Geographical  names  are  naturally  less  distinctive  and 
specific  than  personal  names.  A  geographical  name  indi- 
cates a  place.  Other  people  are  at  liberty  to  establish 
businesses  in  the  same  place  and  no  one  can  take  away 
from  them  the  right  to  use  the  name  of  that  place  to 
inform  the  public  that  they  are  doing  business  there. 
The  Elgin  and  Waltham  watch  companies  have  been  in 
litigation  for  years  over  attempts  by  other  people  to 
pirate  their  reputations  by  the  use  of  the  name  of  the 

77 


IDENTIFYING     YOUR     PRODUCT 

towns  made  famous  by  the  excellence  of  their  products. 
Geographical  names  lack  the  essential  element  of  dis- 
tinctiveness.  They  cannot  point  unmistakably  to  a  single 
producer.  "Chicago  Beef"  means  beef  that  comes  from 
Chicago,  "Minneapolis  Flour"  means  flour  that  comes 
from  Minneapolis.  Anyone  has  the  right  to  go  into 
the  packing  business  in  Chicago  and  has  the  right  to 
tell  the  public  where  his  business  is  located.  To  recur 
for  a  moment  to  the  watch  situation — the  word  "Wal- 
tham"  on  a  watch  in  its  primary  sense  means  that  it  comes 
from  the  town  of  that  name.  It  is  true  that  in  a  second- 
ary sense  it  indicates  the  product  of  the  Waltham  Watch 
Company.  The  courts  have  held  that  anyone  has  the 
right  to  go  to  Waltham  and  establish  watch  works  there 
and  having  that  right  has  the  further  right  to  use  the 
name  Waltham  in  a  primary  sense,  but  may  be  required 
to  couple  with  that  word  such  announcements  as  will  pre- 
vent misapprehension  as  to  the  commercial  origin  of  the 
product.  The  relief  is  not  absolute  in  such  cases,  but 
the  courts  strive  to  harmonize  as  well  as  they  can  the 
rights  of  the  second  comer  to  the  town  to  use  the  name 
of  that  town  to  indicate  where  his  business  is  located, 
with  the  right  of  the  first  user  to  the  good  will  he  has 
established  and  the  right  of  the  public  to  know  whose 
goods  they  are  buying. 

DON'T  SELECT  A  DESCRIPTIVE  NAME 

A  descriptive  name  is  less  distinctive  even  than  a  geo- 
graphical or  personal  name.  Cotton  cloth  means  cloth 
made  of  cotton.  Leather  boots  means  boots  made  out 
of  leather.  These  words  from  their  very  nature  can- 
not indicate  distinctly  the  source  or  origin  of  the  article 
with  any  particular  producer.  This  would  seem  to  be  so 
evident  that  discussion  of  it  is  not  necessary,  but  when 
one  sees  the  advertising  pages  of  magazines  and  the  bill 
boards  plastered  with  names  which  are  descriptive  or  only 
thinly  disguised  descriptions  with  idiot  attempts  made 
to  cover  their  descriptiveness  by  misspelling,  it  makes 

78 


LEGALLY     SOUND     MARKS 

one  feel  that  almost  anything  in  foolishness  is  possible. 
Misspelling  does  not  help  at  all.  The  Supreme  Court  of 
the  United  States  took  occasion  to  remark  in  a  recent 
case  where  it  was  contended  that  indulging  in  ortho- 
graphic eccentricities  made  a  good  trade-mark  out  of  a 
descriptive  word :  "Bad  orthography  has  not  yet  become 
so  rare  or  easily  detected  as  to  make  a  word  the  arbi- 
trary sign  of  something  else  than  its  conventional  mean- 
ing." Descriptive  words  are  not  protected  as  trade- 
marks for  the  excellent  reason  that  to  give  to  one 
producer  the  exclusive  right  to  such  a  word  would  prevent 
others  from  accurately  describing  their  own  goods.  Some 
latitude  is  allowed,  words  which  are  suggestive  merely  are 
not  proscribed,  and  the  description  must  be  so  obvious 
that  its  monopolizing  by  one  trader  would  handicap 
others  in  the  use  of  the  language.  The  rule  against  de- 
scriptiveness  is  not  so  broad  as  to  include  all  descriptive 
words,  however  applied — it  applies  only  to  words  when 
used  in  a  descriptive  sense  —  Gold  Dust  and  Ivory  are 
descriptive  words,  but  not  when  applied  to  washing  pow- 
der or  soap.  In  adopting  a  new  name  it  is  better  to  err 
on  the  side  of  non-descriptiveness  than  the  reverse — 
unless  one  fancies  the  expensive  luxury  of  forensic  dispu- 
tations or  is  a  thorough  sportsman  and  likes  to  give  law- 
yers and  infringers  a  chance  to  make  a  living. 

DON'T  SELECT  A  DECEPTIVE  NAME 

Since  a  trade-mark  must  indicate  distinctly  the  true 
ownership  or  origin  of  the  goods,  it  is  clear  that  where 
a  false  ownership  or  origin  is  indicated,  the  mark  is  not 
a  trade-mark.  This  has  been  held  with  respect  to  the  use 
of  fictitious,  foreign-sounding  names  on  domestic  prod- 
ucts contrived  to  simulate  foreign  articles.  It  was  a 
common  practice  not  many  years  ago  for  cigarette 
makers  to  use  fancy  packages  giving  the  name  of 
imaginary  Russians,  Turks  and  Egyptians  as  makers. 
These  were  uniformly  held  not  to  be  trade-marks.  A  dis- 
tinguished English  judge  remarked  in  a  case  where  it  was 

79 


IDENTIFYING     YOUR     PRODUCT 

sought  to  protect  an  English  cigarette  dealer  masquerad- 
ing as  a  Turk:  "In  my  judgment  where  a  person  uses  a 
word  and  represents  that  word  to  be  applicable  to  the 
product  of  a  manufacturer  or  manufacturers  other  than 
himself  so  as  to  produce  the  belief  that  the  goods  are  the 
manufacture  of  that  third  person  or  persons,  he  cannot 
say  that  the  word  is  distinctive  of  his  own  manufacture." 
In  short,  a  man  cannot  adopt  a  mark  which  has  a  dis- 
tinct meaning  inconsistent  with  the  origin  of  the  product 
with  him  and  assert  that  it  means  his  production  and 
nothing  else. 

It  not  infrequently  happens  that  a  man  in  his  effort 
to  avoid  descriptiveness  blunders  into  a  falsehood.  The 
Keeley  Institute,  to  get  away  from  the  rule  against  de- 
scriptive names,  contended  that  the  words  "Double 
Chloride  of  Gold"  were  fanciful.  The  court  denied  relief 
on  the  ground  of  misrepresentation.  False  marks  are 
objectionable  under  the  well  recognized  rule  that  any 
mark,  device  or  label  which  is  so  worded  or  constructed 
as  to  express  or  imply  a  representation  which  is  false  is 
not  protectible. 

DON'T  SELECT  AN  INFRINGING  NAME 

Even  if  the  owner  of  the  mark  which  is  infringed  does 
not  object,  the  person  selecting  such  a  name  is  unable 
to  protect  it  against  assaults  directed  at  himself.  Sev- 
eral years  ago  a  lithographer  produced  a  cigar  label 
called  Henry  Lee.  A  competitor  got  out  another  Henry 
Lee  label,  which  was  obviously  an  imitation  of  the  first, 
and  the  first  lithographer  sued  on  the  ground  that  his 
rights  were  being  infringed.  Relief  was  denied,  the  court 
concluding  its  opinion  thus:  "There  is  a  third  reason 
why  this  motion  should  not  be  granted.  A  comparison 
of  plaintiff's  label  with  that  used  on  the  brand  of  cigars 
known  as  the  Henry  Clay  cigar  will  make  it  plain  that 
plaintiff's  label  is  as  close  an  imitation  of  the  Henry  Clay 
label  as  the  defendant's  is  of  the  plaintiff's."  It  is  not 
only  unprofitable,  but  embarrassing  to  sue  an  infringer 

80 


LEGALLY     SOUND      MARKS 

and  have  the  infringer  demonstrate  that  you  are  one 
yourself.  It  should  not  be  forgotten  that  infringement 
is  not  necessarily  a  matter  of  wilful  appropriation  of 
another's  trade-mark.  Lack  of  intent  to  pirate  or  even 
want  of  knowledge  of  the  existence  of  the  earlier  mark 
is  no  defense  to  an  action  for  infringement.  Therefore, 
to  be  sure  that  one  is  not  an  infringer,  the  most  careful 
preliminary  survey  of  the  market  should  be  made  to  see 
what  trade-marks  are  in  use.  No  amount  of  caution  in 
this  respect  is  time  wasted,  because  it  is  a  serious  thing 
after  spending  thousands  of  dollars  in  getting  a  trade- 
mark established  to  find  that  some  one  else  has  an  equal 
or  a  better  right  to  it. 

Private  registration  bureaus,  the  files  of  the  Patent 
office,  trade  directories  and  lists,  catalogues  and  the  like, 
should  all  be  investigated.  No  source  which  may  possibly 
yield  information  should  be  ignored.  I  have  known  of 
repeated  instances  where  the  lack  of  such  preliminary 
investigation  has  been  serious.  I  recall  one  case  where 
an  extensive  advertising  campaign  for  a  newly  devised 
brand  of  tobacco  was  well  under  way.  A  man  appeared 
who  claimed  to  have  been  using  the  same  trade-mark  for 
several  years.  An  investigation  confirmed  his  statement. 

It  was  too  late  to  stop  the  advertising  and  get  another 
name,  so  a  sum  was  paid  as  a  consideration  for  an  aban- 
donment of  the  brand  in  favor  of  the  advertiser.  This 
obstacle  out  of  the  way,  it  was  hoped  that  all  would  be 
plain  sailing.  It  was  a  rude  disappointment  when  an  ob- 
scure manufacturer  started  a  suit  in  the  Federal  Court 
for  an  injunction,  claiming  to  have  been  using  the  trade- 
mark for  upwards  of  ten  years.  An  investigation  showed 
some  suspicious  circumstances,  but  there  was  no  doubt 
that  he  had  previously  used  the  mark.  The  court  de- 
clined to  grant  a  preliminary  injunction  and  the  case 
was  ultimately  dismissed  by  the  complainant.  The  trade- 
mark was  one  of  many  casually  used  by  him,  of  no  value, 
except  for  predatory  purposes.  He  at  once  began  to 
put  out  enormous  quantities  of  goods  under  the  brand, 
which,  of  course,  were  readily  salable  on  account  of  the 

81 


IDENTIFYING     YOUR     PRODUCT 

advertising  campaign  just  referred  to.  He  offered  to  sell 
out,  but  at  an  absurd  figure.  Rather  than  submit  to 
this  exaction,  the  unfortunate  advertiser  changed  his 
trade-mark.  There  was  no  alternative.  If  he  kept  on 
using  it,  his  advertising  would  sell  as  many  pounds  of 
tobacco  for  the  parasite  as  for  himself.  This  experience 
was  unfortunate  and  expensive.  A  careful  search  before- 
hand might  have  prevented  it. 

DON'T  BE  COMMONPLACE 

The  don'ts  just  discussed  ought  to  commend  them- 
selves as  sound  to  the  average  business  man  about  to 
adopt  a  trade-mark,  and  whether  they  do  or  not,  they  are 
the  law,  which  he  is  presumed  to  know  and  which  he  vio- 
lates at  his  peril.  This  particular  phase  of  trade-mark 
making,  however,  the  avoidance  of  the  commonplace,  is 
important  and  is  not  understood,  which  is  probably  due 
to  the  inherent  peculiarities  of  human  nature.  A  man 
with  the  best  intentions  in  the  world,  setting  out  to  get 
up  a  label  or  brand  of  his  own,  unconsciously  imitates 
other  successful  brands,  and  he  will  do  it  unless  he  is 
consciously,  honestly  and  strenuously  trying  not  to  do  it. 
I  have  repeatedly  had  to  examine  and  cross-examine  label 
makers  in  lawsuits.  One  will  go  on  the  stand  and  testify 
that  he  gdt  up  a  certain  label.  When  asked  how  he  did 
it,  he  will  usually  say:  "Mr.  So-and-So  came  to  me  and 
said  he  wanted  a  label  for  soap.  Then  I  went  to  a  drug 
store  and  I  got  a  lot  of  cakes  of  soap  to  see  what  kind 
of  labels  they  put  on  soap.  Of  course,  I  didn't  imitate 
any  of  them.  I  made  mine  as  different  as  possible."  The 
best  way  of  having  one  thing  conspicuously  unlike  an- 
other is  not  to  know  beforehand  what  the  other  thing 
looks  like.  Perhaps  the  label  maker  was  perfectly  honest 
in  saying  that  he  did  not  imitate  any  particular  label; 
he  probably  did  not  do  so  consciously;  but  the  very  fact 
that  he  went  out  and  got  those  other  labels  and  set  them 
up  before  him,  resulted  in  his  contriving  for  Mr.  So-and- 
So  a  label  which  was  a  composite  of  other  successful 

82 


LEGALLY      SOUND      MARKS 

brands,  with  no  character  of  its  own.  This  is  such  a 
common  thing  that  it  seems  to  me  that  it  must  almost  be 
universal.  If  a  baker  wants  a  cracker  label,  he  goes  out 
and  gets  a  lot  of  other  cracker  labels  and  looks  them 
over.  If  a  man  wants  a  patent  medicine  label,  he  sends 
out  and  gets  specimens  of  other  patent  medicine  labels 
of  the  class  to  which  his  belongs,  and  consciously  or  un- 
consciously draws  from  them.  This  ought  not  to  be 
done.  In  the  first  place,  it  is  highly  important  as  a  prac- 
tical business  question  to  have  a  label  characteristic  and 
distinctive.  When  other  labels  are  used  as  a  basis  or 
even  as  a  suggestion,  this  is  impossible.  I  am  not  re- 
ferring here  to  the  conscious  imitator,  but  the  uncon- 
scious follower.  The  conscious  imitator  knows  perfectly 
well  what  he  is  up  to.  I  have  in  mind  the  honest  man 
who  is  either  too  lazy  intellectually  or  too  timid  or  too 
short-sighted  to  strike  out  for  himself.  It  is  important 
to  be  as  original  and  distinctive  as  possible  because  then 
every  bit  of  reputation  and  value  the  trade-mark  may 
ever  represent  adheres  to  it,  and,  too,  if  you  expect  the 
public  to  identify  your  product  as  yours,  it  is  only  fair 
to  give  them  an  unmistakable  means  of  doing  it.  There 
is  another  side  of  the  question  which  is  equally  important, 
and  that  is  this:  The  courts  do  not  protect  a  trader  in 
the  use  of  things  which  are  common  to  the  trade,  because 
being  common  to  the  trade,  they  cannot  indicate  commer- 
cial origin  with  any  one  producer. 

Much  of  the  substitution  of  which  manufacturers  and 
advertisers  complain  is  caused  by  their  own  failure  to  give 
to  the  public  an  unmistakable  means  of  identifying  their 
products.  Where  labels  and  devices  lack  distinctiveness 
the  purchaser  has  no  definite  impression  in  his  mind  and 
can  be  induced  to  purchase  one  product  when  he  entered 
the  store  intending  to  purchase  another,  or  can  have  an 
article  he  did  not  expect  to  buy  passed  off  upon  him  with- 
out his  knowing  it.  It  is  only  where  the  article  which 
he  seeks  is  marked  so  distinctively  and  differently  from 
others  that  there  can  be  no  possible  confusion  in  his  own 
mind  that  substitution  becomes  difficult  or  impossible. 

83 


IDENTIFYING     YOUR     PRODUCT 

This  is  shown  by  the  fact  that  fraudulent  passing  off  is 
most  prevalent  where  no  unmistakable  mark  of  identifica- 
tion is  possible;  in  the  sale  of  bulk  goods,  in  prescrip- 
tions and  at  soda  fountains.  It  is  idle  to  expect  that,  as 
a  result  of  advertising,  a  consumer  will  ask  for  a  particu- 
lar product  and  will  insist  upon  getting  it,  unless  he  can 
be  assured  of  two  things:  first,  that  he  is  asking  for  the 
product  that  he  has  seen  advertised;  and  second,  that 
he  is  getting  it  in  response  to  his  demand.  The  first  is 
made  possible  by  the  habitual  and  invariable  reproduc- 
tion in  the  advertisement  of  the  conspicuous  identifying 
element  on  the  package,  and  the  second,  by  having  that 
element  not  only  conspicuous  but  in  fact  identifying. 

It  is  just  as  easy  to  be  distinctive  as  not  to  be.  It  is 
easy  to  avoid  geographical,  descriptive  and  personal 
names.  It  is  no  harder  to  advertise  and  popularize  a 
name  or  package  that  is  in  all  respects  entirely  charac- 
teristic than  it  is  to  popularize  the  descriptive,  the  per- 
sonal, the  geographical  or  the  conventional,  and  the  result 
is  that  when  a  legally  protectible  name  or  package  is  at 
last  established  the  good  will  is  not  jeopardized,  but  be- 
longs to  the  true  owner  and  does  not  have  to  be  shared  with 
a  swarm  of  parasites.  The  name  being  arbitrary  as  ap- 
plied to  the  particular  goods,  no  one  else  has  any  excuse 
for  using  it  in  any  way  whatsoever.  The  package  being 
distinctive  and  not  conventional  or  common  to  the  trade, 
there  is  no  reason  why  any  one  else  should  use  any  part 
of  it ;  and  there  being  no  reason  for  either  of  these  things, 
the  courts  naturally  assume,  and  the  law  presumes,  that 
if  they  are  used  by  others,  the  purpose  is  fraudulent  and 
the  result  deceptive,  and  adequate  and  complete  relief  is 
granted. 

One  thing  ought  never  to  be  lost  sight  of  in  the  selec- 
tion of  a  trade-mark.  Is  it  legally  protectible?  After  a 
fortune  has  been  spent  in  advertising  it,  can  it  be  imi- 
tated with  impunity? 


84 


CHAPTER  VIII 

PROVING   TRADE- MARK 
OWNERSHIP 


WHEN  a  business  man  buys  a  piece  of  real  estate, 
no  matter  how  little  he  pays  for  it,  he  puts  the  deed 
and  abstract  in  his  safe.  When  he  lends  money  he  puts 
the  notes  in  a  secure  place.  When  he  buys  bonds  or 
shares  of  stock  be  puts  them  where  they  will  not  get 
lost  and  can  always  be  had  when  they  are  wanted.  He 
realizes  that  these  things  are  the  evidences  of  his  title 
to  his  land  or  his  money, — the  proof  of  his  ownership. 
No  intelligent  person  in  these  days  will  dispute  the  asser- 
tion that  trade-marks  are  as  often  as  not  of  more  value 
than  the  land  on  which  is  built  the  plant  which  produces 
the  article  which  bears  the  mark.  Many  instances  can 
be  recalled  where  good  will  has  represented  an  entire 
issue  of  common  stock,  and  a  trade-mark  is  nothing  but 
visualized  good  will.  The  owners  of  this  common  stock, 
unless  they  are  inmates  of  an  asylum  for  the  feeble 
minded,  put  their  certificates  in  a  deposit  vault,  or  at 
least  under  lock  and  key.  But  what  about  the  title  deeds 
to  the  trade-mark  itself? 

The  things  which  help  to  prove  priority  of  adoption 
and  use  are  the  trade-mark's  title  deeds,  and  the  way  they 
are  neglected  in  the  average  business  house  is  little  short 
of  criminal.  Anyone  who  has  had  experience  in  proving 
the  adoption  of  a  trade-mark  after  a  period  of,  say,  fifteen 
years,  will  know  at  once  what  I  mean,  and,  of  course,  the 
farther  back  the  date  goes  the  more  difficult  becomes  the 
task.  Reliance  has  to  be  placed  almost  entirely  on  oral 

85 


IDENTIFYING      YOUR     PRODUCT 

testimony.  Usually  some  old  employees  are  found  who 
have  more  or  less  vague  recollections  on  the  subject;  but 
it  frequently  happens  that  a  year  or  two  makes  just  the 
difference  between  success  and  failure  in  litigation  where 
the  title  to  the  mark  and  sometimes  the  very  existence 
of  the  business  are  involved.  The  memory  of  any  man 
is  a  treacherous  thing;  the  beginnings  of  a  trade-mark 
are  frequently  of  little  consequence  at  the  time,  though 
of  enormous  importance  later.  Old  and  young  employees 
die  or  move  away  or  forget.  Letter  and  bill  files  are 
destroyed,  specimens  of  old  labels  are  not  kept,  or  if  kept 
cannot  be  identified.  I  have  known  of  scores  of  cases 
where  there  was  no  doubt  of  a  continuous  use  of  the 
trade-mark  in  controversy  over  a  long  period,  but  abso- 
lutely no  proof  of  it  could  be  adduced.  I  have  known  of 
dozens  of  cases  where  trade-mark  owners  have  been  held 
up  for  large  sums  simply  because  they  were  unable  to 
prove  title  to  their  own  property.  This  is  particularly 
true  in  lines  of  business  where  there  are  numerous  small 
manufacturers  and  dealers,  in  the  milling  industry,  in 
the  cigar  and  liquor  trades  and  many  others. 

EVIDENCE  NEEDED  IN  PROVING  OWNERSHIP 

Large  producers  with  valuable  marks  are  being  con- 
stantly preyed  upon  by  people  who  claim  a  prior  use  and 
make  a  show  of  establishing  it,  the  showing  usually  being 
in  inverse  ratio  to  the  conscience  of  the  alleged  prior 
user.  A  little  investigation  will  demonstrate  to  any  man 
the  difficulty  of  meeting  such  a  claim.  You  have  a  val- 
uable trade-mark;  you  have  taken  for  granted  that  it 
belongs  to  you ;  you  know  in  a  general  way  that  you  and 
your  predecessors  in  business  have  used  it  for  many 
years,  since  1865,  for  example.  The  article  is  popular, 
the  brand  is  valuable.  One  day  a  salesman  sends  in  a 
package  of  goods  not  made  by  you,  picked  up  in  the 
market  with  your  trade-mark  on  it.  You  place  the  matter 
in  the  hands  of  your  lawyer  and  tell  him  to  get  after  the 
scoundrel.  Perhaps  you  have  the  mark  registered  and 

86 


PROVING    TRADE-MARK     OWNERSHIP 

keep  the  certificate  of  registration  in  your  safe.  You  get 
it  out  and  turn  that  over  to  your  counsel.  He  writes 
a  letter  to  the  alleged  infringer,  and  demands  that  he 
discontinue  the  use  of  your  trade-mark.  In  due  time 
a  letter  is  received  claiming  a  date  of  use  anterior  to 
yours,  or  what  is  more  often  the  case,  no  attention  is 
paid  to  the  demand  to  quit,  and  if  a  suit  is  instituted  the 
claim  of  prior  use  is  made  then  for  the  first  time.  Then 
you  are  confronted  with  the  problem  of  proving  your 
case — of  establishing  your  priority  of  adoption  and  use. 
You  call  in  your  old  employees  and  ask  them  questions. 
One  says  "we  were  using  that  mark  when  we  were  up  on 
Fourth  Street",  another  "I  came  to  work  here  World's 
Fair  year  and  we  were  using  it  then",  and  so  on.  You 
look  for  old  labels  and  find  some,  perhaps  stuck  on  the 
wall  in  the  shipping  room,  no  one  knows  who  put  them 
there  or  when;  in  a  flour  mill,  perhaps  there  is  an  old 
stencil  impression  on  a  grain  chute,  but  that  is  all.  You 
find  that  the  books  and  files  back  of  ten  years  have  been 
destroyed,  and  old  price  lists  and  catalogues  are  gone  no 
one  knows  where.  Anyone,  unless  he  has  been  singularly 
fortunate,  who  has  been  through  trade-mark  litigation, 
has  had  this  experience — certainty  of  the  existence  of 
facts  and  utter  inability  to  prove  them. 

Sometimes  the  thing  necessary  to  prove  the  fact  will 
turn  up  in  the  most  unexpected  places.  I  recall  one  case 
where  a  bottle  of  "Blue  Ribbon"  beer,  labelled  and  tagged, 
had  been  on  the  mantelpiece  of  a  Cape  Cod  dwelling 
house  as  an  ornament  for  thirty  years  (Cape  Codders 
being  singularly  abstemious  folk),  until  produced  in  court 
as  an  exhibit.  In  another  case,  there  was  discovered  a 
box  of  old-fashioned  square  bottles  of  "Devoe's  Eagle 
Brand  Snuff",  labelled  and  marked,  which  had  been  on 
a  store-room  shelf  forgotten  for  sixty  years.  In  still 
another,  an  old  stencil  impression,  on  paper,  of  a  flour 
brand  had  been  used  as  a  binder  for  a  set  of  war  time 
Harper's  Weeklies,  and  so  was  preserved.  These  things 
occasionally  happen,  but  not  often.  They  certainly  can- 
not be  expected  to  happen.  When  it  is  necessary  to  go 

87 


IDENTIFYING     YOUR     PRODUCT 

back  over  thirty  or  forty  years  it  is  almost  impossible 
to  get  satisfactory  oral  evidence.  Documentary  proof 
is  much  more  convincing,  and  frequently  where  the  testi- 
mony of  witnesses  is  conflicting  it  is  the  only  kind  of 
evidence  that  carries  weight;  here  comes  the  difficulty. 
Labels,  catalogues,  price  lists  and  the  like,  are  the  most 
ephemeral  things  in  the  world.  They  are  like  the  old 
New  England  primers  which  were  thumbed  and  dogs- 
eared  out  of  existence,  so  that  copies  today  bring  fancy 
prices  from  collectors.  The  newspapers  of  a  day  or  so 
ago  contained  a  statement  that  a  four-cent  stamp  of 
1847  brought  eight  hundred  dollars,  yet  no  doubt  there 
were  thousands  of  them  used  in  1847.  There  must  have 
been  millions  of  Blue  Ribbon  beer  labels  printed  and  used, 
yet  I  recall  a  trade-mark  case  where  one  which  could 
have  been  proved  to  have  been  used  before  1890  would 
have  been  almost  as  valuable  as  a  first  folio  Shakespeare. 
Lithographers'  files  were  ransacked,  branch  offices  in- 
vestigated without  success.  Finally  a  bunch  of  old  orders 
and  labels  was  unearthed  in  a  barrel  in  the  loft  of  a  barn 
in  a  Pittsburg  branch.  These  experiences  are  typical 
and  when  the  remedy  is  so  simple  they  ought  to  be  the 
exception  rather  than  the  rule.  It  ought  not  to  take 
a  whole  organization  a  year  of  steady  digging  to  turn 
up  a  few  old  labels  and  price  lists.  These  things  should 
be  kept  and  systematically  kept.  A  little  ordinary  fore- 
sight would  prevent  all  this  labor  and  eliminate  the  very 
real  danger  that  the  absence  of  such  proof  entails. 

HOW  TO   KEEP  A  RECORD  THAT  WILL  PROVE  THE 
RIGHT  TO  A  TRADE-MARK 

In  every  establishment  where  trade-marks  are  owned 
there  should  be  a  department  of  archives,  in  charge  of 
someone  who  is  responsible  for  it.  In  this  department, 
there  should  be  a  file  for  each  trade-mark.  Whenever 
in  overhauling  old  papers,  anything  comes  to  light  which 
bears  even  remotely  on  the  adoption  and  use  of  any  trade- 
mark it  should  be  carefully  marked  for  identification, 

88 


PROVING     TRADE-MARK     OWNERSHIP 

preserved  and  filed  in  the  file  devoted  to  the  history  of 
that  mark.  When  new  marks  are  adopted  a  record  should 
be  kept.  Proofs  and  specimens  of  all  labels  and  pack- 
ages should  be  preserved,  marked  for  identification  and 
dated.  Complete  files  of  all  price  lists  and  catalogues 
should  be  kept  as  well  as  lithographers'  and  printers'  bills 
for  labels,  a  complete  file  of  all  advertisements,  with  the 
place  and  date  of  publication  or  use  and  the  extent  noted 
upon  each,  and  each  initialed  for  future  identification  and 
carefully  filed  away  and  indexed.  The  names  of  all  per- 
sons who  have  knowledge  of  the  facts  and  a  concise  signed 
statement  from  each  should  be  secured  and  filed.  Memor- 
anda of  the  first  shipments  of  goods  under  the  mark 
should  be  made,  bills  and  invoices  of  these  shipments  pre- 
served, and  tabulation  of  subsequent  shipments  with 
enough  invoices  to  establish  a  continuous  trade,  should 
also  be  kept.  It  is  not  a  bad  idea  to  have  about  the  office 
or  plant  a  certain  place,  such  as  a  trunk  or  drawer,  where 
anything  that  is  discovered  which  throws  light  on  the 
use  of  any  of  the  trade-marks,  may  be  put.  In  this  way 
much  valuable  material  can  be  accumulated  which  at  in- 
tervals can  be  overhauled,  the  worthless  discarded  and  the 
rest  marked  for  identification  and  filed  away  among  the 
archives. 

Unless  some  such  plan  is  followed,  of  preserving  and 
filing  the  evidence  of  adoption  and  use,  which  is  the  only 
real  proof  of  ownership,  trade-mark  property  will  con- 
tinue to  be  insecure. 


80 


CHAPTER  IX 

HOW  UNTRUTHFULNESS  DE- 
STROYS TRADE-MARK  RIGHTS 


TRADE-MARKS  or  labels  which  contain  any  material 
false  statement  will  not  be  protected  against  imita- 
tion. This  rule  has  in  recent  years  been  extended  to 
include  false  statements  in  advertisements,  so  that  a  prod- 
uct which  is  advertised  untruthfully  is  beyond  the  pale  of 
trade-mark  protection. 

This  is  an  application  of  a  maxim  which  is  as  old  as 
equity  itself;  that  he  who  comes  into  equity  must  come 
with  clean  hands.  Its  application  to  trade-marks  is,  of 
course,  consonant  with  good  morals  and  is  entirely  logi- 
cal. When  one  whose  trade-mark  is  infringed  comes  into 
court  to  enjoin  the  pirate  from  further  depredations, 
his  complaint  is  briefly  this — I  have  built  up  a  reputation 
for  my  goods ;  I  have  placed  upon  my  goods  a  means  of 
identification  by  which  that  reputation  is  perpetuated; 
a  pirate  has  imitated  my  mark  and  is  endeavoring  to  steal 
that  reputation  and  by  means  of  his  imitation  is  deceiving 
the  public  into  the  belief  that  his  goods  are  mine.  In 
short,  the  complaint  in  such  cases  always  is  that  the  de- 
fendant is  misrepresenting  his  goods  and  deceiving  the 
public.  If,  therefore,  the  complainant  himself  is  deceiv- 
ing the  public  with  respect  to  the  very  thing  for  which 
he  seeks  protection,  he  is  hardly  in  a  position  to  ask  the 
interposition  of  a  court  to  enjoin  a  fellow  rogue. 

The  difficulty  in  practice  is  that  while  this  doctrine 
when  brought  to  the  attention  of  the  average  man  is  at 
once  accepted  as  sound,  not  knowing  what  the  courts 

90 


CLEAN     HANDS     AGAINST      INFRINGERS 

have  held  to  be  a  material  false  representation,  he  fails 
to  apply  it  to  his  own  business. 

Generalizing  broadly,  there  are  four  things  about  a 
product  which  are  important — who  makes  it,  where  it  is 
made,  what  it  is  made  of  and  what  it  is  good  for.  Each 
of  these  is  a  factor  which  influences  the  public  in  making 
purchases  and  in  choosing  between  competitive  articles. 
It  may  safely  be  said,  therefore,  that  any  statement  as  to 
these  four  things  is  material  and  if  false  forfeits  protec- 
tion against  trade  piracy. 

WHO  MADE  THE  ARTICLE? 

Taking  these  four  things  in  their  order,  let  us  consider 
for  a  moment  false  statements  as  to  the  maker.  The  com- 
mon practice  among  sellers  of  soaps,  perfumes  and  cos- 
metics to  attach  some  fancy  French-sounding  name  as 
manufacturers  comes  within  this  principle,  as  well  as  the 
equally  common  and  quite  as  reprehensible  custom  of 
cigar  markers  to  use  names  of  imaginary  Spaniards,  of 
glove  and  leather  goods  and  sauce  dealers  of  some  myth- 
ical Englishman.  These  usually  are  commonplace,  vul- 
gar frauds,  not  calling  for  any  particular  comment,  but 
it  is  easy  for  a  business  man,  even  with  the  best  inten- 
tions in  the  world,  to  run  afoul  of  the  unclean  hands  rule 
in  this  particular  and  make  himself  an  outlaw  with  no 
trade  rights  that  any  competitor,  however  conscienceless, 
is  bound  to  respect. 

Consider  for  a  moment  the  case  of  Pollack,  of  Wheel- 
ing. Augustus  Pollack  was  a  pioneer  stogie  manufac- 
turer of  Wheeling,  West  Virginia.  He  was  the  man  who 
made  famous  what  Kipling  called  "that  terrible  article, 
a  Wheeling  Stogie".  He  took  pride  in  his  product  and 
named  it  "Augustus  Pollack's  Stogie"  and  covered  the 
boxes  with  personal  guaranties,  signed  in  facsimile 
"Augustus  Pollack".  The  stogies  became  widely  known 
as  "Augustus  Pollack  Stogies"  and  "Pollack  Stogies". 

In  the  course  of  years  Pollack  died  and  his  business 
was  continued  by  his  administrator,  Howard  Hazlett, 

91 


IDENTIFYING     YOUR     PRODUCT 


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Under  the  law,  a  personal  guaranty,  such  as  the  above,  valid  during  the  life  of 

the  undersigned,  has  been  held  a  false  representation  when  used  unaltered  by  the 

successors  of  the  deceased   guarantor,  and    the    business  done   under   it   was 

refused  protection  against  imitation 

92 


CLEAN     HANDS     AGAINST     INFRINGERS 

who  was  a  Wheeling  lawyer.  The  labels  were  not  changed, 
the  personal  guaranties  over  the  facsimile  signature  of 
Augustus  Pollack  still  were  used,  and  this  letter  purport- 
ing to  be  signed  by  him  was  enclosed  in  each  box. 

After  Augustus  Pollack's  death  and  while  the  labels 
were  in  the  condition  just  described,  two  brothers  named 
Pollack,  who  lived  in  Pittsburg,  decided  to  embark  in 
the  stogie  business.  They  called  their  product  Pollack's 
Stogies  and  at  the  outset  used  labels  and  packages  mi  ch 
like  the  Wheeling  Pollack's.  Hazlett,  the  administrat  r, 
sued  to  restrain  the  use  of  the  name  Pollack  and  le 
alleged  imitative  label,  contending  that  the  defendants 
were  guilty  of  unfair  competition  because  their  cond  ct 
was  calculated  to  represent  that  their  stogies  were  he 
genuine  Pollack  stogies. 

It  was  asserted  by  the  defendants  that  Hazlett  did 
not  come  into  equity  with  clean  hands.  "He  claims,"  they 
argued,  "that  we  should  be  enjoined  because  he  says  we 
are  deceiving  the  public  into  the  belief  that  our  goods  are 
the  genuine  Pollack  stogies.  What  are  genuine  Pollack 
stogies?  Those  made  and  personally  guaranteed  by 
Augustus  Pollack,  of  course — the  box  that  contains  what 
the  complainant  claims  as  the  genuine  article  says  so. 
The  complainant  is  not  Augustus  Pollack — Augustus 
Pollack  is  dead.  Therefore,  he  is  seeking  to  enjoin  us 
from  making  exactly  the  same  representation  that  he, 
himself,  is  making.  If  it  is  false  in  our  case  it  is  equally 
so  in  his.  What  is  sauce  for  the  goose  is  sauce  for  the 
gander."  It  was  held  by  the  United  States  Circuit  Court 
and  affirmed  afterward  by  the  Circuit  Court  of  Appeals 
that  Hazlett  did  not  come  into  equity  with  clean  hands, 
that  he  had  been  guilty  of  a  false  representation  of  a 
material  fact — the  personal  origin  of  the  goods  he  sold, 
and  was  in  no  position  to  ask  the  aid  of  a  court  in  en- 
joining an  inf ringer,  however  unfair  the  inf ringer's  con- 
duct might  have  been.  If  Hazlett,  on  taking  over  the 
business,  had  made  an  adequate  announcement  on  the 
labels  of  the  change  in  the  origin  of  the  goods,  a  different 
outcome  might  have  been  expected. 

93 


IDENTIFYING     YOUR     PRODUCT 

This  is  one  of  many  cases  laying  down  the  rule  that  a 
false  assertion  of  the  origin  of  the  article  is  fatal  to  relief 
against  infringement.  The  only  way  to  prevent  this  dis- 
astrous consequence  is  to  see  to  it  that  when  any  change 
in  origin  is  made  the  label  states  the  fact  in  appropriate 
language;  for  example,  "Nero  Coffee,  now  packed  by 
Royal  Valley  Coffee  Co.,  successor  to  Peter  Smith  &  Sons," 
or  "La  Matilde  Cigars,  established  by  Jose  Morales  & 
Co.  at  Havana  and  now  made  at  Tampa,  Florida ;  J. 
Fred  Wilcox  &  Co.,  successors".  There  is  no  necessity 
of  giving  a  complete  family  tree  or  tracing  a  genealogy 
on  a  label,  even  if  such  a  thing  were  possible,  but  a  suffi- 
cient announcement  should  be  made  so  that  the  public 
may  be  fully  informed  of  the  change  in  the  origin  of  the 
goods. 

WHERE  WAS  THE  PRODUCT  MADE? 

The  geographical  origin  of  some  articles  is  an  impor- 
tant matter.  In  some  cases  articles  of  a  certain  descrip- 
tion have  a  local  reputation  and  in  others  the  reputation 
of  a  locality  benefits  the  specific  products  there  manu- 
factured. Instances  readily  suggest  themselves.  It  has 
been  held  fraudulent  for  a  miller  of  Milwaukee  to  repre- 
sent his  flour  as  originating  in  Minneapolis ;  for  a  stogie 
maker  in  Chicago  to  state  that  his  product  is  made  in 
Pittsburg  and  for  a  brewer  in  New  York  to  call  his  beer 
St.  Louis  beer. 

The  Prince  Metallic  Paint  cases  are  illustrative  of  the 
application  of  the  unclean  hands  rule  to  a  false  statement 
of  geographical  origin.  The  proprietors  of  Prince's 
Metallic  Paint  secured  the  iron  ore  of  which  the  paint 
was  made  from  a  certain  tract.  The  article  was  known 
as  "Prince's  Metallic  Paint"  and  acquired  a  reputation 
which  was  very  largely  due  to  the  fact  that  the  ore  from 
which  it  was  made  was  of  particular  character;  and 
it  possessed  this  character  as  coming  from  a  particu- 
lar tract  of  land.  Without  notice  or  announcement  the 
manufacturers  procured  ore  from  other  tracts  and  con- 

94 


CLEAN     HANDS     AGAINST      INFRINGERS 

tinued  to  sell  it  under  the  same  name  and  without  explan- 
ation. It  was  held  that  this  was  a  sufficient  fraud  to  pre- 
vent a  court  of  equity  from  enjoining  an  infringement  of 
the  name  "Prince's  Metallic  Paint",  because  while  the  ore 
which  was  used  might  have  been  as  good  as  the  ore  from 
the  original  Prince's  tract,  it  was  not  the  same;  and  that 
it  was  not  proper  to  deceive  the  public  even  for  their  own 
benefit. 

In  using  this  case  as  an  illustration  the  effort  has  been 
to  avoid  reference  to  the  common  device  of  manufacturers 
with  more  enterprise  than  conscience;  for  example,  who 
place  "Havana"  on  boxes  containing  domestic  cigars, 
"Paris"  on  boxes  containing  domestic  cosmetics  or  on 
labels  for  home  produced  clothing  or  millinery,  and  thus 
seek  to  attract  to  their  own  goods  the  advantage  of  the 
reputation  that  some  particular  locality  may  have  in  the 
production  of  goods  of  a  similar  character.  The  purpose 
in  these  cases  is  sufficiently  plain  to  strike  any  right 
thinking  manufacturer  as  illegitimate.  The  reason  for 
using  the  Prince's  case  as  an  illustration  is  to  show  that 
with  the  best  intentions,  a  person  ignorant  of  the  unclean 
hands  principle  as  enunciated  by  the  courts,  may  get  into 
serious  trouble  and  lose  valuable  rights. 

WHAT  IS  THE  PRODUCT  MADE  OF? 

Consider  now  for  a  moment  the  third  material  repre- 
sentation with  respect  to  goods:  What  the  article  is 
made  of.  Many  years  ago  R.  E.  Queen  was  a  druggist 
at  Reno.  He  made  and  sold  over  the  counter  of  his  drug 
store  Confection  of  Senna,  a  product  well  known  to  all 
pharmacists  and  given  in  all  formularies.  Confection 
of  Senna  is  composed  of  prunes,  tamarinds,  figs  and  senna 
leaves,  stirred  up  into  a  forbidding  looking  compound 
and  administered  with  a  spoon  to  those  who  need  it.  It 
is  usually  consumed  on  the  premises.  Mr.  Queen  con- 
ceived the  notion  of  thinning  this  preparation  a  little 
and  putting  it  up  in  bottles  for  family  use  so  that  the 
purchaser  could  take  his  dose  home  in  a  package  instead 

95 


IDENTIFYING     YOUR     PRODUCT 

of  on  the  hoof.  It  was  thought  a  good  idea  to  give  the 
new  remedy  an  attractive  name.  Using  figs  to  a  consider- 
able extent  in  the  compound,  the  name  "Syrup  of  Figs" 
appealed  to  Mr.  Queen  as  a  good  name,  attractive  and 
easy  to  remember,  -so  he  adopted  it.  When  put  up  in 
bottles  the  syrup  quickly  fermented  and  spoiled.  To 
remedy  this,  more  and  more  of  the  fruit  substances  were 
removed  until  a  stable  compound  was  obtained.  The 
name  Syrup  of  Figs,  however,  was  just  as  attractive  as 
ever  it  was,  and  was  kept.  There  was  no  intention  to  de- 
ceive. Mr.  Queen  was  busy  trying  to  make,  and  suc- 
ceeded in  making,  a  good  product.  If  the  fruit  juices 
spoiled  the  medicine  he  naturally  took  them  out.  The 
article  was  meritorious  and  became  very  popular. 

As  in  the  case  of  any  good  product,  numerous  infringe- 
ments appeared  under  various  names  and  with  more  or 
less  imitative  cartons  and  wrappers.  Suits  were  brought 
and  when  sued  all  the  defendants  interposed  the  defense 
that  the  complainant  did  not  come  into  equity  with  clean 
hands,  because  the  substance  sold  as  Syrup  of  Figs  was 
not  in  fact  a  syrup  of  figs,  but  its  medicinal  efficacy  was 
derived  from  the  senna  it  contained.  With  one  or  two 
exceptions  the  courts  acceded  to  this  view,  and  at  last  a 
case  got  to  the  Supreme  Court  of  the  United  States, 
where  it  was  held  that  the  use,  under  the  circumstances, 
of  the  name  "Syrup  of  Figs"  on  a  product  containing 
but  a  small  amount  of  fig  substance  and  which  owed  its 
medicinal  virtue  to  extract  of  senna  was  a  false  represen- 
tation and  disentitled  to  relief,  and  this  in  spite  of  the 
fact  that  defendant's  conduct  was  clearly  fraudulent. 
The  complainant,  therefore,  found  himself  an  outlaw. 
After  this  decision  the  following  course  was  adopted: 
The  label  was  changed  to  read  "Syrup  of  Figs  and  Elixir 
of  Senna"  and  the  product  was  made  actually  and  liter- 
ally to  conform  with  the  label  in  the  sense  that  about 
seventy-five  per  cent  of  it  was  actually  made  from  figs 
and  the  remaining  twenty-five  per  cent  was  elixir  of  senna. 
After  thus  cleaning  up,  an  infringer  appeared  who  imi- 
tated the  new  package,  which  the  court  promptly  en- 

96 


CLEAN     HANDS     AGAINST      INFRINGERS 

joined,  holding  that  the  doctrine  of  unclean  hands  is  a 
temporary  bar  only  and  continues  no  longer  than  the 
misrepresentation  which  gives  rise  to  it. 

WHAT  IS  THE  PRODUCT  GOOD  FOR? 

What  an  article  is  good  for  is  rather  a  wide  general- 
ization, but  as  an  illustration  of  the  application  of  the 
rule  in  this  particular,  there  is  an  old  case  involving  a 
product  known  as  "The  Balm  of  a  Thousand  Flowers", 
a  cosmetic  which  in  spite  of  its  high  sounding  name 
was  a  liquid  soap  composed  of  grease  and  lye.  On  the 
labels  there  were  extravagant  statements  of  what  the 
product  was  good  for,  what  it  would  cure,  and  there  were 
very  few  things  which,  if  the  makers  were  to  be  believed, 
it  would  not  cure.  The  proprietor  of  this  marvel  sued  a 
rival  dealer  who  had  imitated  his  labels  and  not  to  be  out- 
done, called  his  product  "The  Balm  of  Ten  Thousand 
Flowers"  with  curative  claims  in  proportion.  In  his  opin- 
ion denying  the  complainant  relief,  because  of  the  extrav- 
agant and  mendacious  claims,  the  court  intimated  that 
as  long  as  "The  Balm  of  a  Thousand  Flowers"  might  be 
procured,  it  is  folly  to  grow  old  and  a  mistake  to  die. 

The  cases  above  instanced  are  not  at  all  extravagant 
or  unusual.  It  is  the  settled  doctrine  of  the  courts  that 
a  person  cannot  have  protection  in  his  trade-mark  if  in 
it  or  in  his  advertisements  or  labels  he  is  guilty  of  any 
material  false  representation.  While  the  doctrine  has 
frequently  been  invoked  unsuccessfully  and  the  courts 
have  held  that  mere  trade  hyperbole  is  not  necessarily 
fraudulent,  the  universal  holding  has  been  that  where 
there  is  any  false  statement  as  to  a  material  fact,  it  is 
fatal  to  relief.  It  is  well  to  bear  this  rule  in  mind  when 
in  a  state  of  advertising  exaltation.  It  is  well  also  to  sit 
soberly  down  at  frequent  intervals  with  a  blue  pencil 
and  go  through  labels  and  advertisements  and  ruthlessly 
cut  out  anything  that  is  not  the  literal  truth  and  cut  out 
equally  everything  that  is  literal  truth,  but  is  susceptible 
of  giving  a  false  impression.  In  doing  this  the  labels 

97 


IDENTIFYING     YOUR     PRODUCT 

and  advertisements  should  be  viewed,  not  from  the  stand- 
point of  the  producer  who  knows  all  the  facts,  but  from 
the  standpoint  of  the  consumer  who  knows  none  of  them. 
It  is  not  safe  to  assume  that  because  a  particular  form 
of  misrepresentation,  direct  or  implied,  is  tolerated  by 
the  trade  and  regarded  as  a  harmless  humbug,  it  is  safe 
or  proper  to  be  continued. 

In  one  English  case  it  was  urged  in  defense  that  it 
was  the  custom  of  everybody  in  the  cigar  business  to  put 
Hamburg  cigars  in  boxes  bearing  names  of  mythical 
Spaniards  as  the  purported  makers,  embellished  with 
pictures  of  Morro  Castle  and  with  foreign  and  Spanish 
looking  signs  and  seals  all  over  them.  The  judge  who 
decided  the  case  dryly  remarked  that  these  things  were 
not  a  fortuitous  concurrence  of  lies;  that  they  were  a 
concurrence  of  lies  with  an  object  and  end  and  that  object 
and  end  must  be  to  deceive  somebody;  otherwise,  he  in- 
quired, why  was  this  elaborate  concatenation  of  pictorial 
lies  placed  upon  the  boxes  at  all?  Lying  does  not  become 
excusable  or  respectable  because  everyone  has  done  it. 

After  a  good  deal  of  thought  on  this  subject  I  have 
about  come  to  the  conclusion  that  irrespective  of  the 
moral  turpitude  and  legal  disadvantage  of  it,  falsehoods 
do  not  help  to  sell  goods.  A  package  or  label  contain- 
ing the  briefest  possible  statement  about  an  article  is 
just  as  effective  as  one  going  into  all  manner  of  detail 
and  making  all  manner  of  assertions. 

In  getting  up  new  labels  and  revising  old  ones,  the 
fewer  positive  statements  of  fact  they  contain  the  better 
and  the  fewer  things  will  the  proprietor  have  to  explain 
and  justify  if  he  has  to  resort  to  litigation  to  stop  an 
infringement,  because  it  is  always  to  be  borne  in  mind 
that  the  consideration  of  the  defendant's  conduct,  how- 
ever fraudulent  it  may  be,  is  not  reached  until  the  com- 
plainant's case  has  been  scrutinized  and  found  clean. 
Some  courts  in  recent  years  have  gone  so  far  as  to  hold 
that  the  burden  is  upon  the  complainant  to  allege  and 
prove  the  truth  of  all  statements  on  his  labels  and  in  his 
advertising  as  a  part  of  his  prima  facie  case. 

98 


CHAPTER  X 

THE  TRANSFER  OF  TRADE 
MARKS  AND  GOOD  WILL 


THE  underlying  philosophy  of  the  law  of  trade-marks 
is  even  now  only  vaguely  understood  by  many  well 
informed  people,  both  in  the  legal  profession  and  outside 
of  it.  The  owner  of  a  horse  or  a  dog,  a  house  or  a  fac- 
tory is  generally  pretty  familiar  with  what  the  term  own- 
ership implies.  If  his  property  is  a  piece  of  real  estate  he 
knows  he  can  keep  people  off  of  it,  or  let  whom  he  chooses 
on,  that  he  can  sell,  lease  or  mortgage. 

We  frequently  hear  the  word  "own"  and  "ownership" 
used  in  connection  with  trade-marks,  and  are  accustomed 
to  speak  of  a  trade-mark  as  property  and  assume  it  to 
be  subject  to  all  the  rights  of  ownership,  to  the  same 
extent  as  other  things  to  which  we  apply  the  term  prop- 
erty. Failing  to  appreciate  what  a  trade-mark  is,  people 
fall  into  errors  that  sometimes  are  costly.  Suppose  for 
a  minute  we  reduce  the  thing  to  its  elements.  Take,  for 
example,  the  words  "Gold  Dust".  If  you  should  use 
these  words  in  conversation  with  a  friend  on  the  street 
and  a  man  should  step  up  to  you  and  say,  "I  own  the 
words  'Gold  Dust'  and  I  forbid  you  to  use  them,"  you 
and  your  friend  would  laugh  at  him  and  wonder  when  he 
escaped  from  the  asylum.  On  the  other  hand,  no  one 
disputes  the  right  of  N.  K.  Fairbank  Company  to  for- 
bid the  use  of  the  words  "Gold  Dust"  on  a  package  of 
washing  powder.  What  is  the  difference?  They  are  or- 
dinary English  words.  Why  has  the  Fairbank  Company 
any  better  right  to  them  than  the  extraneous  person 

99 


IDENTIFYING     YOUR     PRODUCT 

you  regarded  as  a  lunatic?  Simply  this,  that  there  is  no 
property  in  a  word  or  name  as  such.  It  is  only  when  it 
symbolizes  a  business  good  will  that  the  attributes  of 
property  attach  to  it.  The  words  "Gold  Dust"  on  a 
package  of  washing  powder  indicate  that  it  is  Fairbank's 
product  and  Fairbank  naturally  has  the  right  to  forbid 
their  use  on  a  similar  product  by  others,  because  such  use 
would  be  a  representation  that  the  article  so  marked  was 
Fairbank's  and  illegitimately  secure  to  itself  the  benefit 
of  Fairbank's  good  will.  A  trade-mark  then  is  not  a 
name  or  device  in  the  abstract,  but  is  a  name  or  device 
applied  to  goods  to  indicate  their  commercial  origin.  A 
trade-mark  does  not  exist  as  an  extrinsic  thing  and  hence 
is  not,  in  any  sense,  property  when  so  considered.  It  is 
never  property  dissociated  from  a  business  because  when 
so  separated  it  cannot  indicate  a  commercial  source.  It 
becomes  endowed  with  certain  attributes  of  property  when 
affixed  to  merchandise,  because  it  here  represents  the  good 
will  of  the  producer  of  the  merchandise  to  which  it  is 
affixed.  It  is  of  value  exactly  to  the  extent  that  the 
information  it  conveys  or  implies  is  of  value.  If  it  is 
valuable  that  the  public  should  be  informed  that  certain 
washing  powder  is  made  by  Fairbank,  then  the  name 
"Gold  Dust",  which  is  the  means  of  conveying  that  in- 
formation, is  valuable.  The  property,  however,  is  not  in 
the  name,  but  in  the  name  plus  the  information  it  con- 
veys concerning  the  origin  of  the  merchandise  to  which 
it  is  applied — the  name  as  symbolizing  a  business  good 
will  or  reputation.  It  is  the  good  will  or  reputation  that 
is  the  property  and  not  the  means  as  a  separate  thing 
by  which  it  is  symbolized. 

Failure  to  keep  these  fundamentals  in  mind  frequently 
results  in  disaster.  It  is  an  erroneous  notion  that  the 
trade-mark  itself  is  property.  When  it  is  assumed  to  be 
property,  it  is  supposed  to  carry  with  it  what  the  civ- 
ilians used  to  call  the  jus  disponendi,  or  the  right  to  sell 
invariably  the  attribute  of  property — and  always  inci- 
dent to  the  right  of  ownership;  and  so  we  have  people 
trying  to  sell  trade-marks  as  they  sell  land  or  chattels. 

100 


TRANSFERRING     A     TRADE-MARK 

Such  attempted  transfers  are  void  for  two  reasons:  in 
the  first  place,  a  trade-mark  does  not  exist  except  as  an 
incident  to  a  business  and  hence  an  attempted  sale  apart 
from  the  business  has  nothing  to  operate  upon ;  and  in  the 
second  place,  such  contracts  are  void  as  against  public 
policy  because  they  promote  deception. 

Concretely,  if  "A"  had  made  and  sold  Star  brand  candy, 
so  that  Star  brand  became  "A's"  trade-mark,  Star  brand 
meant  to  the  public,  by  association,  "A's"  goods;  for 
"A",  therefore,  to  sell  to  "B"  the  Star  brand  without 
transferring  his  business  and  good  will,  would  amount 
to  a  contract  whereby  "B"  was  authorized  to  represent 
to  the  public  that  goods  of  his  production  were  in  fact 
the  production  of  "A",  and  this,  of  course,  is  fraud. 

WHEN  A  TRADE-MARK  CAN  BE  ASSIGNED 

Trade-marks  can  lawfully  be  assigned  as  an  incident 
to  the  transfer  of  a  business,  but  such  matters  ought  to 
be  carefully  attended  to,  both  legally  and  actually.  A 
trade-mark  may  be  transferred,  but  only  in  connection 
with  the  thing  that  it  stands  for;  namely,  the  business 
that  it  represents.  Except  in  infrequent  instances  and 
under  peculiar  and  rarely  met  special  circumstances,  such 
as  incidental  to  the  transfer  of  secret  or  patented  proc- 
esses, a  trade-mark  without  a  business  cannot  be  as- 
signed and  such  attempted  assignments  are  useless  and 
legally  are  void.  As  well  try  to  part  a  man  from  his 
shadow  as  to  separate  a  trade-mark  from  the  business 
from  which  legally  it  is  inseparable. 

Serious  attempts  are  being  made  to  perform  this  impos- 
sibility and  are  constantly  coming  to  light  in  the  reported 
cases.  Many  years  ago  John  Forrest  carried  on  business 
at  London  as  a  manufacturer  of  watches  which  he  marked 
"John  Forrest,  London",  and  on  the  back  plate  "Chro- 
nometer Maker  to  the  Admiralty".  Forrest  died  in  1871 
and  his  administrator  sold  his  business  and  good  will  to 
Carley  &  Co.,  who  until  1874  sold  watches  with  the  name 
of  John  Forrest  upon  them.  In  1890  Carley  &  Co.  failed, 

101 


IDENTIFYING     YOUR     PRODUCT 

and  their  assets  were  assigned  to  a  man  named  Read  in 
trust  for  creditors.  In  1891  Read  sold  to  another  trader 
the  business  of  Carley  &  Co.,  and  on  the  same  day  as- 
signed to  a  man  named  Thorneloe  "the  name  and  good 
will  of  John  Forrest".  The  defendant  began  to  sell 
watches  marked  "John  Forrest,  London",  and  was  sued 
by  Thorneloe.  The  defense  was  that  if  the  defendant's 
use  of  the  name  was  fraudulent,  that  Thorneloe's  use  was 
equally  so  because  he  was  not  John  Forrest.  Thorneloe 
then  produced  his  contract  whereby  he  had  attempted  to 
acquire  the  right  to  stamp  the  name  John  Forrest  on 
watches  made  by  him.  The  court  dismissed  this  claim 
with  the  language: 

It  was  a  mere  grant  of  a  license  to  use  the  name  of  John  Forrest 
and  I  need  scarcely  say  that  apart  from  the  other  objection  to  the 
license  purported  to  be  granted,  a  trade  name  or  mark  cannot  be 
validly  assigned  in  gross.  They  cannot  do  what  the  plaintiff  is 
seeking  to  do  in  this  case;  namely,  to  treat  a  name  as  being  property 
in  itself,  which  gives  a  right  of  action  against  any  person  using  the 
name  without  his  permission. 

To  show  a  different  angle  of  the  situation,  the  case 
of  the  Fadettes  Ladies  Orchestra  is  instructive.  Ethel 
Atwood  organized  a  band  of  musicians,  which  she  called 
The  Fadettes  Ladies  Orchestra.  She  hired  and  paid  the 
members  of  it.  The  organization  acquired  a  reputation 
and  their  services  were  in  great  demand.  Miss  Atwood 
sold  to  Mary  E.  Messer  all  her  "right,  title  and  interest 
in  and  to  the  organization  known  as  The  Fadettes  Ladies 
Orchestra  *  *  *  together  with  all  right  acquired  in 
the  establishment,  name  and  trade-mark  in  the  words 
Fadettes  Ladies  Orchestra".  Miss  Atwood  then  ceased 
to  have  any  connection  with  the  company.  The  other 
members  of  the  organization  were  not  parties  to  the  con- 
tract and  did  not  agree  to  play  under  the  direction  of 
Miss  Messer.  Another  organization  of  women  musicians 
adopted  the  name  "The  Fadettes"  and  Miss  Messer  sued 
for  an  injunction  to  restrain  the  use  of  this  title.  At  the 
time  suit  was  brought  no  member  of  the  original  Atwood 
organization  remained  with  her.  The  question  was  at 
once  presented,  whether  Miss  Messer  acquired  a  right  in 

lot 


TRANSFERRING     A     TRADE-MARK 

the  name  "Fadettes"  which  she  could  enforce  by  way 
of  injunction  against  the  defendant  "Fadettes".  The 
Supreme  Court  of  Massachusetts  answered  the  question 
in  the  negative,  holding  that  so  far  as  Ethel  Atwood 
had  any  right  or  ownership  in  the  trade  name  which  des- 
ignated the  organization  under  her  management,  it  was 
personal  to  her,  depending  upon  her  personal  reputation 
and  skill,  and  it  was  not  assignable ;  that  there  was  noth- 
ing in  the  relation  between  herself  and  the  other  members 
of  the  organization  that  she  could  convey  and  if  there 
were  any  benefit  in  the  use  by  Miss  Messer  of  the  name 
"Fadettes  Ladies  Orchestra"  it  would  be  only  to  mis- 
lead and  defraud  the  public  by  implying  that  she  and 
such  musicians  as  she  employed  were  the  same  persons 
who  had  formerly  gained  this  reputation  under  the  name 
Fadettes.  The  Court  concludes:  It  is  well  settled  that 
the  courts  will  not  enforce  a  claim  of  this  kind  which 
contains  a  misrepresentation  to  the  public. 

A  TRADE-MARK  IS  INSEPARABLE  FROM  THE 
BUSINESS  ITSELF 

Anyone  who  is  familiar  with  the  flour  milling  busi- 
ness knows  the  multitude  of  brands  that  are  employed.  It 
is  not  unusual,  therefore,  to  find  different  mills  using  the 
same  brand  in  different  sections  of  the  country  and  some- 
times in  the  same  sections,  because  the  brands  are  legion 
and  human  ingenuity  is  limited.  Sometimes  different 
millers  try  to  clean  up  the  situation  by  attempting  to 
purchase  brands  from  other  mills.  These  purchasers 
are  almost  invariably  transfers  of  the  brand  and  involve 
no  succession  of  the  business  and  universally  are  void. 
Two  mills  got  into  a  controversy  over  the  brand  Swans- 
down.  It  was  not  settled  until  the  Circuit  Court  of 
Appeals  was  reached.  The  dispute  arose  out  of  this  state 
of  facts:  Meyer  &  Bulte  sought  to  restrain  Iglehart 
Brothers  from  the  use  of  the  brand.  Meyer  &  Bulte  car- 
ried on  business  in  St.  Louis  from  1880  to  1897  as  flour 
manufacturers,  later  moving  to  Kansas  City,  where  at 
the  time  of  the  beginning  of  the  suit  they  were  in  busi- 

103 


IDENTIFYING     YOUR     PRODUCT 

ness.  Philip  Land  originated  the  Swansdown  brand  at 
Sweet  Springs,  Missouri,  in  1865.  He  was  succeeded  by 
various  concerns,  the  latest  being  the  Sweet  Springs  Mill- 
ing Co,  The  Sweet  Springs  Milling  Co.,  in  1892,  assigned 
the  Swansdown  brand  to  the  complainant,  Meyer  &  Bulte. 
There  was  no  succession  to  the  business.  It  appeared 
that  the  complainant  never  had  any  interest  and  acquired 
none  in  the  milling  plant  operated  and  owned  by  the 
Sweet  Springs  Milling  Co.,  or  the  other  persons  and  firms 
who  were  the  successors  of  Land.  Iglehart  Brothers  was 
a  firm  doing  business  at  Evansville,  Indiana,  and  was 
succeeded  by  a  corporation  of  the  same  name  in  1879. 
In  1879  the  firm  began  the  use  of  a  flour  brand  contain- 
ing the  words  Swansdown.  It  will  be  observed  on  the 
question  of  priority,  that  if  the  complainant  acquired 
any  right  to  the  trade-mark  Swansdown  from  Land's 
successors,  its  rights  were  prior  in  point  of  time  to  the 
defendant's;  but,  on  the  other  hand,  if  that  assignment 
was  void  the  defendant's  rights  were  superior,  because 
they  began  to  use  the  brand  in  question  in  1879,  whereas 
the  purported  assignment  was  dated  1892.  It  will  be 
seen,  therefore,  that  the  validity  of  this  assignment  was 
the  turning  point  of  the  case.  The  assignment  was  in 
this  form — it  recited  that  Meyei;  &  Bulte  "are  desirous 
of  acquiring  the  exclusive  ownership,  right,  title  and 
use  of  said  brand  or  trade-mark  for  said  class  of  mer- 
chandise", and  thereupon  the  Sweet  Springs  Milling  Co. 
sold,  assigned  and  transferred  to  Meyer  &  Bulte  "all  their 
right,  title  and  interest  in  and  to  said  brand  and  trade- 
mark". In  commenting  on  this  situation  the  Court  of 
Appeals  for  the  Seventh  Circuit  took  occasion  to  remark : 

A  trade-mark  or  trade  name  is  of  no  virtue  in  and  of  itself.  It 
becomes  of  value  only  through  use  and,  therefore,  by  use  it  is  an  as- 
surance to  purchasers  of  excellence  of  the  article  to  which  it  is 
affixed  as  manufactured  by  the  one  whose  name  appears  as  the 
producer.  The  fanciful  or  arbitrary  trade-mark,  by  association  with 
the  name  of  the  producer,  becomes,  therefore,  valuable  because  it  is 
a  sign  or  symbol  to  the  purchaser  and  assurance  to  him  of  the 
genuineness  of  the  article  of  its  manufacture  by  the  proprietor 
of  the  trade-mark  or  trade  name.  Dissociated  from  such  manu- 
facturer it  is  not  an  assurance  of  the  genuineness.  When  used  by 

104 


TRANSFERRING     A     TRADE-MARK 

another  it  works  a  fraud  upon  the  purchaser.  A  trade-mark  is 
analogous  to  the  good  will  of  the  business.  Who  ever  heard  of  a 
good  will  being  sold  to  one  while  the  original  owner  continues  the 
business  as  before?  The  good  will  is  inseparable  from  the  business 
itself.  So,  likewise,  is  a  trade  name  that  gives  assurance  to  a 
purchaser  that  the  article  upon  which  is  stamped  the  trade-mark  or 
trade  name  is  the  genuine  product  of  the  manufacturer  to  whom 
the  trade  name  or  trade-mark  points  by  association  as  the  maker 
of  the  article.  Therefore,  to  give  a  necessary  qualification  to  the 
assignability  of  a  trade-mark  there  shall  go  with  it  the  transfer 
of  the  business  and  good  will  of  the  owner  of  the  symbol. 

In  referring  then  to  the  purported  assignment  the 
Court  observed: 

To  uphold  such  a  transfer  would  be  to  ignore  the  fundamental 
office  of  a  trade-mark,  would  be  to  disregard  its  purpose  and  object, 
would  be  to  sanction  the  fraud  upon  the  public  purchasing  the 
article.  I  am  of  opinion,  therefore,  that  the  complainants  acquired 
no  title  to  this  trade-mark  under  the  transfer  from  Land  and  his 
successors  in  business. 

The  decisions  as  well  as  the  philosophy  of  the  matter 
ought  to  make  it  clear  that  trade-marks  cannot  be  picked 
up  by  the  roots,  separated  from  the  business  which  gives 
them  life,  and  sold  as  a  separate  entity ;  but  any  lawyer 
who  has  had  experience  in  trade-mark  matters  will  recall 
the  client  who  produces  as  the  source  of  his  title  an 
endorsement  on  a  certificate  of  registration  or  an  elab- 
orately drawn  contract,  the  gist  of  which  is  "for  valuable 
consideration,  I  hereby  sell,  assign  and  transfer  all  my 

right,  title  and  interest  in  aforesaid  trade-mark  to 

"  and  the  expression  of  amaze- 
ment when  he  is  told  that  as  an  abandonment  of  the 
mark  against  the  assignor  the  document  may  be  worth 
something,  but  as  an  assignment  or  a  source  of  title  it 
is  worthless.  I  recall  perfectly  an  officer  of  a  very  large 
institution  who  announced  that  he  had  just  bought  what 
he  described  as  one  of  the  most  valuable  steel  trade  marks 
in  the  world.  As  a  matter  of  fact  this  company  had 
actually  paid  close  to  half  a  million  dollars  for  a  brand 
and  had  not  thought  it  worth  while  or  attempted  to  get 
anything  else.  Of  course,  the  sale  was  a  nullity  and  when 
he  was  so  advised  the  steel  man  nearly  had  hysterics. 
Fortunately  the  situation  was  not  hopeless,  because  it  so 

105 


IDENTIFYING     YOUR      PRODUCT 

happened  that  the  transaction  (though  the  parties  to  it 
were;  not  aware  of  it)  came  exactly  within  the  one  recog- 
nized exception  to  the  rule.  The  product  on  which  the 
mark  was  used  was  made  under  a  secret  process,  which, 
as  a  matter  of  fact,  had  been  disclosed  to  the  supposed 
purchaser  of  the  mark  and  by  dint  of  drawing  and  hav- 
ing executed  a  new  set  of  conveyances  and  actual  transfer 
of  and  tuition  in  the  secret  formulas  a  title  was  obtained 
which  the  courts  afterward  sustained. 

HOW  THE  LAW  APPLIES  TO  LICENSES 

The  rule  forbidding  transfers  of  a  trade-mark  apart 
from  the  business  of  which  it  is  an  adjunct,  applies 
equally  to  licenses.  As  a  general  rule  and  subject  to  the 
same  infrequent  exceptions  as  exist  in  the  case  of  assign- 
ments, a  trade-mark  cannot  be  licensed  and  attempts  to 
do  so  are  almost  always  void. 

The  historic  attempt  to  separate  Sousa  from  his  band 
illustrates  the  point  now  under  discussion.  Sousa  made 
a  contract  with  a  man  named  Blakeley,  whereby  Blakeley 
was  to  act  as  manager  and  Sousa  the  director  in  the  or- 
ganization and  touring  of  the  band.  The  compensation 
to  be  paid  to  Sousa  included  a  proportion  of  the  annual 
net  profits  of  the  enterprise.  Blakeley  died.  The  ques- 
tion was,  was  this  contract  assignable?  Blakeley's  estate 
claimed  the  right  to  use  Sousa's  name  in  connection  with 
musical  organizations.  It  was  contended  that  by  virtue 
of  the  contract  the  name  Sousa  became  the  property  of 
Blakeley,  and  upon  his  death  passed  to  his  estate.  It 
was  held  that  the  assignment  of  the  name  Sousa  could 
not  be  enforced,  for  the  reason  that  its  enforcement  would 
be  against  public  policy  and  enable  the  assignee  to  impose 
upon  and  deceive  the  public  by  inducing  them  to  attend 
concerts  under  the  impression  that  they  were  to  be  given 
by  Sousa,  when  in  fact  he  would  have  nothing  whatever 
to  do  with  them. 

Since  a  trade-mark  is  an  adjunct  to  a  business  the 
converse  of  the  proposition  is  also  true.  The  sale  of  a 

106 


TRANSFERRING     A     TRADE-MARK 

business  and  good  will  carries  with  it  as  an  incident  the 
brands  and  trade-marks  used  in  it  unless  they  are  pecu- 
liarly and  essentially  personal  to  the  original  proprietor, 
and  since  the  Supreme  Court  has  held  that  a  trade-mark 
comprising  a  man's  name  and  portrait  was  included  in  the 
sale  of  his  business,  it  must  be  conceded  that  very  few 
trade-marks  would  not  pass  in  a  general  sale  of  business 
and  good  will,  even  if  no  specific  mention  were  made  of 
them  in  the  transfer. 

In  connection  with  attempted  transfers  of  trade-marks 
it  must  be  borne  in  mind  that  there  is  no  magic  in  the 
words  "business  and  good  will";  the  courts  will  analyze 
the  situation,  and  if  it  is  clear  that  no  business  has  been 
in  fact  transferred,  will  hold  the  assignment  a  mere  sale 
of  a  naked  symbol  and  void.  Such  was  a  case  where  a 
silk  merchant  attempted  to  sell  the  trade-mark  "Radium" 
for  silk.  It  appeared  that  after  the  attempted  sale  he 
continued  the  business  as  before,  making  and  selling  the 
same  sort  of  silk  but  only  substituting  the  name  "Electra" 
for  "Radium".  It  was  held  that  the  assignment  of  the 
name  "Radium"  was  void  because  to  be  valid  the  business 
must  have  been  transferred,  and  that  since  the  business 
could  not  be  both  sold  and  retained,  and  as  it  had  unde- 
niably been  retained,  the  sale  was  in  effect  nothing  but 
an  attempt  to  sell  a  naked  symbol  and  was  therefore  a 
nullity.  Said  the  Court: 

It  is  not  contended  that  the  original  owner  of  the  trade-mark  shall 
go  out  of  the  dry  goods  business  nor  that  it  shall  cease  to  sell  silk 
dress  goods  in  the  piece,  to  which  it  has  not  appropriated  the 
trade-mark.  But  when  a  trader  has  sold  some  particular  article 
under  a  selected  name  to  such  an  extent  as  to  secure  registration, 
he  has  established  a  special  business  in  which  that  trade-mark  is 
used,  and  if  the  trade-mark  becomes  so  valuable  as  to  induce  him 
to  sell  it,  he  must,  as  a  condition  of  transfer  under  the  statute, 
assign  that  special  business  with  the  trade-mark  of  which  it  was 
the  parent.  Eiseman  &  Co.,  therefore,  acquired  no  rights  under 
the  alleged  assignment  which  did  not  carry  the  special  business. 
The  suggestion  of  hardship,  in  that  by  subsequent  action  the  assignor 
has  defeated  the  assignment  for  which  it  received  a  valuable  con- 
sideration is  not  persuasive;  they  have  their  remedy  against  the 
company,  if  the  transfer  was  not  in  fact  what  they  were  given  to 
understand  it  would  be. 

107 


IDENTIFYING     YOUR     PRODUCT 

In  trade-mark  matters  the  place  where  the  most  numer- 
ous and  the  most  costly  mistakes  are  most  frequently 
made  is  in  the  matter  of  transfers.  The  regrettable  part 
of  it  is  that  most  of  them  could  have  been  avoided.  It 
is  a  common  thing  at  a  conference  of  lawyers  discussing 
the  conduct  of  a  trade-mark  case  to  hear  someone  say, 
"Oh,  well,  the  title  looks  well  enough  on  paper,  but  wait 
till  he  tries  to  prove  up.  There  are  four  or  five  transfers 
and  it's  dollars  to  doughnuts  there'll  be  a  hole  in  some  of 
them."  And  there  usually  is. 


108 


CHAPTER  XI 

REGISTRATION  OF  TRADE- 
MARKS 


UNITED  STATES  statutes  permit  the  registration 
of  trade-marks  used  in  commerce  with  foreign 
nations,  among  the  several  states,  or  with  the  Indian 
tribes.  Registration  creates  no  rights  in  a  trade-mark. 
The  right  to  the  mark  depends  upon  priority  of  adoption 
and  use.  Registration  is  simply  a  public  record  of  a 
claim  of  right  already  acquired.  Registration  does  not 
confer  a  government  monopoly  analogous  to  patent  and 
copyright.  It  deprives  no  one  of  any  rights  possessed 
before,  and  confers  upon  the  registrant  no  property 
rights  that  he  would  not  have  without  such  registra- 
tion. If  the  registrant  is  not  the  owner  of  the  mark, 
the  registration  does  not  make  him  the  owner.  Failure 
to  register  by  anyone  else  who  has  a  better  right  does 
not  destroy  or  impair  that  right.  Failure  to  register 
creates  no  presumption  against  ownership  and  regis- 
tration does  not  destroy  any  previously  acquired  com- 
mon law  rights  in  others  than  the  registrant. 

Registration  makes  the  registrant  presumptively  the 
owner,  but  this  presumption  can  always  be  rebutted  so 
that  even  where  the  mark  is  registered,  if  it  can  be  shown 
that  anyone  else  has  priority  of  use,  registration  goes 
for  naught.  Registration  is  valuable  as  a  public  claim 
of  ownership,  for  certain  additional  remedies  that  the 
statute  provides,  as  a  foundation  for  protection  in  for- 
eign countries,  and  as  conferring  certain  jurisdictional 
advantages. 

109 


IDENTIFYING     YOUR     PRODUCT 

While  the  registration  of  a  legally  valid  and  prac- 
tically efficient  trade-mark  is  of  undoubted  value,  it  is 
unfortunate  that  an  undue  emphasis  is  put  upon  regis- 
tration by  many  persons  who  either  have  no  real  notion 
of  what  a  trade-mark  is  and  how  the  right  to  it  is  ac- 
quired, or  who  expect  to  charge  fees  for  securing  a  gov- 
ernment certificate  decorated  with  seals  and  ribbons.  A 
certificate  of  trade-mark  registration  is  made  a  fetish 
by  many  who  look  upon  a  trade-mark  as  an  end  in  itself 
rather  than  a  means  to  an  end,  to  whom  some  inefficient 
and  purposeless  symbol  is  a  thing  to  be  striven  for,  nur- 
tured and  safeguarded.  A  virile,  conspicuous  and  un- 
mistakable means  of  distinguishing  one  producer's  goods 
from  all  others,  selected  at  the  outset  with  due  care  to 
its  practical  fitness  and  legal  exclusiveness,  is  its  own  pro- 
tection. Such  may  well  be  registered  as  an  additional  safe- 
guard. Registration,  however,  like  the  trade-mark  itself, 
is  a  means,  not  an  end.  The  end  is  to  give  the  public  an 
easy  and  certain  means  of  identifying  goods  as  those  of 
a  certain  producer,  and  by  this  means  to  render  adver- 
tising effective  and  substitution  difficult.  The  regis- 
tration of  details  of  packages  having  no  identifying 
efficiency  is  as  futile  as  their  use.  If  it  is  regarded  as 
nothing  but  a  harmless  eccentricity,  no  damage  is  done, 
but  it  does  not  make  a  useless  trade-mark  useful  any 
more  than  an  expensive  binding  makes  literature  of  trash. 

Registration  of  a  trade-mark  under  the  Federal  statute 
is  not  a  complicated  process.  A  statement  is  signed  by 
the  applicant  specifying  his  name  and  address  and  citi- 
zenship, the  goods  on  which  the  trade-mark  is  used,  the 
date  of  first  use  and  the  manner  of  application  to  the  mer- 
chandise, accompanied  by  sworn  declaration  that  the  ap- 
plicant is  entitled  to  the  exclusive  use  of  the  trade-mark 
and  has  used  it  in  interstate  or  foreign  commerce  or  in 
commerce  with  the  Indian  tribes.  A  drawing  and  speci- 
mens of  the  mark  as  actually  used  also  are  required, 
with  a  filing  fee  of  ten  dollars.  An  examination  is  made  by 
the  officials  of  the  Patent  office,  and  if  the  trade-mark  is 
found  to  be  registrable,  it  is  published  for  thirty  days  in 

110 


TRADE-MARK     REGISTRATION 

the  official  Gazette  of  the  Patent  office,  during  which  time 
anyone  who  conceives  that  he  would  be  damaged  by  the 
registration  may  oppose  the  application.  If  no  oppo- 
sition is  filed  a  certificate  of  registration  issues*  Regis- 
tration cannot  be  secured  until  after  the  trade-mark 
has  actually  been  used  upon  merchandise  in  interstate, 
foreign  or  Indian  commerce. 

STATE  REGISTRATION 

Most  of  the  states  of  the  United  States  have  statutes 
permitting  the  registration  of  trade-marks  in  the  offices 
of  the  several  Secretaries  of  State.  Such  registration  is 
of  value  as  an  additional  local  protection  supplementing 
that  of  the  common  law.  Prosecution  under  these  state 
statutes  is  an  efficacious  method  of  dealing  with  finan- 
cially irresponsible  infringers,  for  a  criminal  remedy  is 
provided,  involving  fine,  imprisonment  of  the  offender  and 
destruction  of  the  infringing  devices. 

FOREIGN  REGISTRATION 

In  many  nations  the  theory  of  trade-mark  ownership 
differs  from  ours.  In  such  countries  registration  creates 
the  right  and  the  person  first  to  register  owns  the  mark 
regardless  of  whether  or  not  he  is  the  real  owner  accord- 
ing to  our  notions.  It  is  a  common  occurrence  for  natives 
to  register  in  their  own  names  well  known  and  valuable 
foreign  trade-marks  and  thereby  vest  in  themselves  the 
ownership  of  them  to  the  exclusion  of  the  true  proprietor, 
whose  goods  are  stopped  at  the  border,  or  are  seized  and 
held  until  the  pirate  is  bought  out,  or  the  market  is  aban- 
doned. This  danger  is  a  very  real  one  and  can  be  avoided 
by  timely  registration  by  the  real  owner,  which  is  a  pre- 
caution that  ought  always  to  be  taken. 

It  is  not  only  the  local  pirate  who  is  to  be  feared;  a 
constant  source  of  trouble  is  the  foreign  agent  who  adopts 
registration  of  his  principal's  trade-marks  in  his  own 
name  as  a  means  of  securing  for  himself  an  exclusive 
agency  and  favorable  terms.  No  trouble  is  encountered 

111 


IDENTIFYING     YOUR     PRODUCT 

as  long  as  friendly  relations  are  maintained,  but  the 
minute  friction  develops,  it  begins.  Shipments  to  others 
are  confiscated,  suits  are  brought  and  the  home  concern 
usually  has  to  submit  to  unconscionable  exactions. 

The  Western  Clock  Company  not  long  ago  had  such  an 
experience.  A  Mexican  jeweler  when  in  this  country  saw 
the  Big  Ben  advertising.  On  his  return  to  Mexico  he 
sent  in  an  order  for  clocks.  This  order  was  followed  by 
others  until  a  steady  business  of  respectable  size  was 
developed.  There  was  no  trouble  until  orders  came  from 
other  dealers  in  Mexico  for  Big  Ben  clocks.  Shipments 
were  made,  and  shortly  afterward  a  letter  was  received 
from  the  dealer  who  had  had  the  first  clocks,  threatening 
confiscation  of  all  Big  Ben  clocks  shipped  into  Mexico  to 
anyone  but  him.  He  insisted  further  on  a  special  price 
and  announced  that  unless  his  demands  were  at  once 
acceded  to,  that  he  would  have  clocks  made  in  Germany, 
would  mark  them  Big  Ben  and  sell  them  throughout 
Mexico.  He  closed  this  modest  communication  by  stating 
that  he  had  registered  the  Big  Ben  trade-mark  in  his  own 
name  and  was  entirely  within  his  rights  in  what  he  asked. 
Fortunately  soon  afterward  he  incautiously  came  to  New 
York,  where  he  was  served  with  a  mandatory  injunction 
directing  him  to  cancel  his  registration;  and  rather  than 
risk  a  sojourn  in  the  Tombs,  he  complied. 

This  experience  is  typical.  An  American  firm  with  a 
large  export  trade  once  received  a  most  courteous  letter 
from  a  dealer  in  Mexico  in  which  he  stated  that  he  was 
aware  that  unscrupulous  compatriots  of  his  had  on  occa- 
sions registered  as  their  own,  valuable  foreign  trade- 
marks, through  which  means  the  foreign  manufacturer 
was  subjected  to  expense  and  annoyance.  To  prevent 
such  misfortune,  he — the  writer — had  taken  the  precau- 
tion of  registering  the  trade-mark  of  the  firm  addressed. 
He  would  esteem  it  a  privilege  to  execute  an  assignment. 
He  had  been  put  to  some  expense  in  obtaining  the  regis- 
tration— a  matter  of  two  thousand  dollars — for  which 
he  expected  to  be  reimbursed.  And  with  renewed  assur- 
ances of  distinguished  consideration  he  kissed  their  hands 

112 


TRADE-MARK     REGISTRATION 

and  remained  theirs  to  command.  After  some  bargaining 
a  substantial  amount  was  paid  by  the  American  firm  to 
purchase  their  own  property. 

These  occurrences  do  not  happen  in  Mexico  alone, 
though  they  are  common  there.  Cubans  are  constantly 
offending  in  this  particular.  The  Japanese  are  experts. 
Sometimes  with  a  Japanese  one  must  buy  his  trade-marks 
not  alone  from  the  pirate,  but  from  several  of  his  friends 
and  family;  sometimes  from  the  same  pirate  more  than 
once.  Wells  and  Richardson  Company  when  about  to 
apply  for  registration  of  Diamond  Dyes  found  that  Mat- 
suoka  had  registered  the  mark.  There  was  nothing  to  do 
but  buy  his  registration,  which  was  done.  There  was 
some  delay  in  filing  the  Wells-Richardson  application; 
and  when  it  was  filed  it  appeared  that  Matsuoka  had  a 
few  days  after  he  had  assigned  his  registration  of  Dia- 
mond Dyes,  applied  the  second  time  for  the  registration 
of  the  same  mark.  Fortunately  he  had  neglected  to  com- 
ply with  an  essential  provision  and  his  application  was 
rejected  by  the  Japanese  authorities.  Before  he  could 
remedy  the  defect  and  apply  a  third  time,  the  Wells- 
Richardson  application  was  safely  filed.  The  solicitor  in 
Tokio  who  conducted  the  affair  stated  that  the  whole 
occurrence  was  "characteristically  Japanese". 

The  same  danger  exists  quite  generally  throughout 
South  and  Central  America.  It  was  particularly  violent 
in  Argentina  a  few  years  ago.  Conditions  are  much 
better  now,  though  still  sufficiently  serious  to  make  regis- 
tration by  foreigners  of  their  trade-marks  there  a  prudent 
step  if  they  expect  ever  to  enter  the  Argentine  market. 

Even  continental  Europe  is  not  free  from  this  sort  of 
piracy.  The  Germans  at  one  time  practiced  it  assidu- 
ously. It  is  a  wise  precaution  to  register  trade-marks  in 
all  foreign  countries  into  which  trade  is  likely  to  extend, 
as  insurance  against  trouble.  The  cost  is  little  enough 
when  compared  with  the  exasperation  and  expense  which, 
frequently  are  the  result  of  failure  to  do  so. 


113 


CHAPTER  XII 

PUTTING  AN  ADVERTISING 
POLICY  BEHIND  YOUR  MARK 


A  UNIVERSITY  professor  and  a  very  learned  man 
once  said  that  to  advertise  is  "to  mount  an  emi- 
nence and  make  a  noise" — in  other  words,  to  attract 
attention.  And  no  doubt,  if  the  eminence  is  high  enough 
and  the  noise  loud  enough,  people  will  look  around  and 
say  to  each  other:  "Who's  the  lunatic  that's  making  all 
the  racket?"  and  go  about  their  affairs.  If  any  of  them 
should  happen  to  meet  the  disturber  face  to  face  the 
next  day,  he  would  doubtless  not  be  recognized,  because 
the  noise  and  not  the  maker  of  it  probably  created  the 
more  lasting  impression. 

Not  a  little  advertising  is  of  this  character — it  makes 
a  momentary  stir  and  is  forgotten,  because  there  is  noth- 
ing about  it  to  make  a  distinct  impression  of  who  is  doing 
it  and  what  it  is  all  about. 

A  store  keeper  who  would  advertise  in  the  papers  and 
altogether  fail  to  identify  his  place  of  business  with  his 
announcement  would  be  regarded  as  beyond  treatment. 
His  efforts  are  futile  unless  he  tells  the  people  expected 
to  read  his  advertising,  who  is  doing  it,  so  that  they 
may  know  where  to  go  to  do  their  trading.  An  an- 
nouncement of  a  spring  opening,  unless  it  tells  whose  it 
is  and  where  it  is  is  not  very  useful.  But  when  it  comes 
to  advertising  merchandise  which  may  be  had  at  many 
different  places,  these  things  which  no  sane  man  would 
neglect  when  advertising  for  a  retail  store  are  commonly 
ignored. 

114 


GOOD      WILL     ADVERTISING 

The  only  rational  aim  in  advertising  except  for  purely 
temporary  purposes,  is  to  create  a  permanent  business 
good  will.  The  effect  is  bound  to  be  ephemeral  unless 
there  is  some  one  thing  constantly  appearing  in  every 
advertisement  which  is  easily  impressed  upon  the  mind 
of  the  observer,  readily  recognized  and  easily  recalled. 
In  order  that  there  may  be  a  connecting  link  between  the 
advertisement  and  the  article  advertised,  this  identifying 
element  in  the  advertisement  should  also  appear  in  connec- 
tion with  whatever  is  being  advertised.  Otherwise  the 
advertisement  is  bound  to  lack  efficiency  in  not  unmis- 
takably connecting  itself  with  the  product  advertised.  It 
is  utterly  irrational  to  fail  to  give  to  a  prospective  pur- 
chaser, who  may  be  sufficiently  impressed  by  the  advertise- 
ment to  want  the  thing  advertised,  a  way  of  identifying 
that  thing  and  definite  means  of  knowing  that  he  is  get- 
ting it  when  he  makes  his  purchase. 

All  advertising  matter  might  well  be  analyzed  to  see 
if  the  public  is  being  treated  fairly  in  this  respect,  and 
to  be  sure  that  each  individual  advertisement  is  unmis- 
takably connecting  itself  with  the  thing  to  promote  the 
sales  of  which  it  is  being  used. 

PUTTING  THE  EMPHASIS  IN  ADVERTISING  ON  THE  THING 
THAT  IDENTIFIES  THE  GOODS 

The  goods  which  are  advertised  should  be  scrutinized 
to  find  out  what  are  the  things  by  which  they  are  iden- 
tified— whether  name,  trade-mark,  appearance  of  pack- 
age, color  or  arrangement  of  labels  or  whatever  it  is 
about  them  that  is  distinctive.  Care  should  be  taken  to 
see  that  the  identifying  badges  of  the  merchandise  under 
consideration  be  made  conspicuous  features  of  all  adver- 
tisements. Some  people  have  eye  memory  and  some  ear 
memory,  some  individuals  get  their  impressions  more 
easily  from  words,  some  from  pictures.  The  eye  and 
picture  memory  people,  however,  are  probably  more  nu- 
merous. Therefore,  whenever  it  is  possible  to  do  so,  the 
package  itself,  preferably  in  its  own  colors  as  it  is  seen 

115 


IDENTIFYING     YOUR     PRODUCT 

by  the  buyer,  should  be  displayed  in  the  advertising. 
When  this  is  done  it  makes  no  difference  whether  the 
observer  is  one  who  relies  for  his  mental  images  on  words 
or  pictures.  Here  he  gets  both. 

When  a  person  has  a  definite  picture  in  his  mind  of 
the  thing  he  wants  to  buy,  it  is  difficult  for  a  dealer  to 
substitute  anything  else.  When  a  purchaser  lacking  this 
definite  idea — one  who  has  not  had  a  clear  mental  image 
forced  upon  him — accepts  a  substitute  for  the  advertised 
goods,  the  manufacturer  cannot  blame  the  dealer.  The 
dealer  is  hardly  a  substitutor  in  such  a  case.  The  pur- 
chaser himself,  with  his  hazy  notions  of  what  he  wants, 
makes  the  substitution  possible.  The  advertiser  is  the 
one  who  is  to  blame,  for  not  casting  his  advertisements  in 
such  shape  as  to  afford  unmistakable  means  of  identify- 
ing the  thing  advertised  and  to  force  it  into  the  minds 
of  the  public. 

ADVERTISING  EXPENDITURE  IS  THE  PURCHASE 
PRICE  OF  GOOD  WILL 

It  is  quite  as  important  thus  to  connect  the  advertise- 
ment with  the  article  as  it  is  to  mark  the  article.  Except 
as  a  mere  temporary  means  of  attracting  attention,  there 
is  no  use  in  putting  pictures  of  women,  boys,  dogs  and 
the  like  on  posters  and  street  car  signs — unless  the  iden- 
tical woman,  boy  or  dog  appears  also  on  the  package  of 
the  goods  advertised.  They  have  otherwise  no  possible 
relevancy.  As  a  guessing  match  or  memory  exercise,  it 
may  be  interesting  to  people  to  ask  themselves  what  it 
is  that  is  advertised  by  the  picture  of  a  funny  man  carry- 
ing a  sack  of  flour,  but  as  a  means  of  helping  customers 
to  pick  out  and  buy  any  particular  brand  of  flour,  it  is 
useless,  unless  the  same  funny  man  is  recognized  upon 
the  flour  bags  stacked  in  the  grocery  store.  Even  talk 
about  quality,  and  arguments  or  reasons  why  particular 
goods  should  be  bought  may  well  be  subordinated  to  the 
main  thing — the  certainty  that  if  these  things  are  read 
and  believed,  there  will  be  no  doubt  to  what  article  they 
apply. 

116 


GOOD      WILL     ADVERTISING 

This  point  seems  elementary,  but  a  minute  or  two  spent 
looking  about  a  street  car  or  at  a  bill  board  will  show 
how  frequently  it  is  disregarded.  No  permanent  results 
from  advertising  can  be  expected  unless  the  advertising 
and  the  goods  are  linked  together  in  some  perfectly 
obvious  way,  by  an  unmistakable  means  of  identification 
placed  upon  the  goods  and  invariably  reproduced  in  ad- 
vertising. 

In  addition  to  its  value  as  a  permanent  asset  this  iden- 
tifying means  has  an  everyday  practical  utility  in  secur- 
ing to  the  proprietor  all  of  the  benefit  to  be  derived  from 
the  reputation  of  his  goods  by  typifying  and  perpetuat- 
ing that  reputation,  and  insuring  full  returns  earned  by 
the  advertising  expenditure,  for  it  gives  the  public  an 
assurance  that  when  they  think  they  are  getting  the  ad- 
vertised article  they  are  in  fact  getting  it. 

The  proper  view  to  take  of  advertising  expenditure  is 
that  it  is  an  investment.  It  is  the  purchase  price  of  the 
most  valuable  of  all  commercial  property,  a  business  good 
will  and  a  public  friendliness.  This  good  will  and  friend- 
liness adhere  to  the  means  by  which  the  article  advertised 
is  distinguished  from  others.  Good  will  is  the  permanent 
principal  and  continued  advertising  clearly  associated 
with  identifying  means  cumulatively  adds  to  its  value. 
There  is  something  to  build  on  and  each  year  the  struc- 
ture becomes  more  and  more  secure. 

The  observance  of  this  theory  involves  responsibilities. 
It  is  of  course  manifest  that  the  article  advertised  and 
identified  both  in  the  advertising  and  by  means  of  a  tr&de- 
mark  or  other  distinguishing  feature  must  be  of  such 
quality  as  to  encourage  repeated  purchases  by  the  same 
persons.  Identified  advertising  and  merchandise  can  thus 
promote  and  conserve  good  will,  but  they  can  similarly 
concentrate  ill  will.  Even  at  the  accepted  birth  rate  of 
"suckers"  there  are  not  enough  of  them  to  be  fooled 
many  times  by  the  same  thing;  and  when  by  the  marks 
upon  it  an  undesired  thing  is  recognizable,  it  can  be 
avoided.  People  keep  away  from  brands  of  merchandise 
they  dislike  by  reason  of  past  unsatisfactory  experience, 

117 


as  certainly  as  they  keep  away  from  individuals  they 
dislike. 

Advertising  is  a  thing  about  which  one  cannot  be  dog- 
matic. If  it  keeps  goods  moving,  it  is  good  advertising 
no  matter  what  anyone  says,  but  it  seems  true  that 
advertising  may  inspire  ill  will.  I  can  recall,  as  any- 
one can,  prejudices  I  have  against  what  are  probably 
meritorious  articles,  that  I  have  got  by  reading  adver- 
tisements in  which  there  is  something  I  consciously  or 
unconsciously  resent.  For  example,  as  a  New  Englander 
born,  when  I  see  baked  beans  advertised  as  the  master- 
piece of  a  French  chef — well,  I  have  eaten  beans  which 
were  cooked  by  a  New  England  housewife  and  tasted  the 
terrible  work  of  a  French  chef. 

The  suggestion  of  a  skunk  in  connection  with  beer  is 
not  appetizing  to  me  personally. 

Having,  on  one  occasion,  worn  a  suit  of  English-made 
clothes,  clothing  advertisements  which  talk  about  London, 
Bond  Street  and  so  on,  do  not  inspire  in  me  emotions 
either  of  comfort  or  class. 

To  see  in  advertisements  pictures  of  vacuous  looking 
young  men  alleged  to  be  wearing  certain  brands  of  col- 
lars or  shirts  does  not  attract  me,  because  I  am  appre- 
hensive that  if  I  should  buy  and  wear  that  sort  of  collar 
or  shirt  I  might  acquire  such  an  expression  of  exiguous 
mentality. 

Of  course,  these  are  little  things  and  sound  trivial,  but 
they  have  kept  me  from  buying  certain  makes  of  goods 
which  no  doubt  are  as  good  or  much  better  than  those  I 
do  buy.  What  I  think  or  feel  in  this  respect  is  of  no  con- 
sequence; but  if  as  an  average  member  of  the  consuming 
public  I  react  in  this  way,  it  is  a  fair  inference  that  other 
people  do  also. 

It  is  quite  possible  to  induce  a  general  feeling  of 
friendliness  and  good  will  toward  the  article  or  estab- 
lishment advertised,  apart  from  its  intrinsic  merit.  The 
average  person  acts  more  often  from  impulse  or  sug- 
gestion than  from  any  process  of  reasoning.  Advertising 
that  can  inspire  a  friendly  feeling  in  the  reader  is  likely 

118 


GOOD      WILL     ADVERTISING 

to  sell  more  goods  than  that  which  attempts  to  instruct 
him.  The  cheeriness  of  Big  Ben  advertising  has  been 
more  persuasive  in  selling  Big  Ben  clocks  than  any 
amount  of  talk  about  the  way  the  works  are  made,  could 
possibly  have  been.  By  sheer  good  nature,  the  alarm 
clock,  which  used  to  be  an  abomination  to  all  of  us,  has 
been  made  a  pleasant  thing  to  look  upon  and  listen  to. 

It  is  doubtful  if  the  good  will  Big  Ben  has  induced 
applies  to  alarm  clocks  in  general,  because  all  the  Big 
Ben  advertising  has  been  so  unmistakably  characteristic 
of  this  particular  clock,  and  hence  the  benefit  resulting 
has  adhered  to  it  very  largely,  if  not  exclusively.  No 
amount  of  description  of  the  mechanical  efficiency  and 
excellence  of  manufacture  which  Big  Ben  so  conspicu- 
ously has,  could  have  induced  such  widespread  popularity. 
People  like  Big  Ben  and  buy  because  they  do,  just  as 
we  like  our  friends  in  spite  of  their  virtues.  It  becomes 
a  matter  of  heart  rather  than  head.  It  is  sometimes  as 
exasperating  to  hear  the  merits  of  a  commodity  contin- 
ually extolled  as  it  is  to  hear  the  worth  of  an  individual. 
The  only  undying  hatred  I  ever  was  conscious  of  was 
toward  an  excessively  meritorious  boy  who  lived  in  our 
neighborhood  and  whose  many  excellencies  were  frequently 
impressed  upon  me  by  my  elders. 

FINDING  YOUR  POINT  OF  CONTACT  WITH  THE  CONSUMING  PUBLIC 

So,  too,  the  idea  of  cheapness  can  be  overdone.  "The 
best  so-and-so  for  the  price"  is  a  tacit  admission  of  in- 
feriority. Excellence  of  quality  and  reasonableness  of 
price  are  not  necessarily  inconsistent.  No  sane  person 
buys  anything  solely  because  it  is  cheap.  Price  as  a 
matter  of  information  is  well  enough,  but  a  cheap  price 
as  an  inducement  to  buy  is  dangerous  (except  for  an 
article  of  known  and  recognized  merit),  because  it  im- 
plies that  cheapness  is  its  principal  claim  for  considera- 
tion and  cheapness  suggests  inferiority. 

The  local  agent  for  a  certain  automobile  recently  ad- 
vertised that  in  order  to  get  rid  of  his  sales  quota  he 

110 


IDENTIFYING     YOUR     PRODUCT 

was  planning  to  make  a  special  price  on  these  cars.  The 
effect  on  good  will  towards  the  manufacturer  among 
owners  who  thus  saw  the  "class"  of  their  cars  reduced, 
and  among  dealers  who  were  respecting  the  standard 
price,  might  easily  have  been  foreseen. 

The  point  of  contact  with  the  consuming  public  ought 
to  be  definitely  fixed  and  viewed  from  every  angle,  for 
here  it  is  that  good  will  is  created  or  ill  will  develops.  The 
advertising  policy  in  the  most  far-sighted  concerns  has 
been  so  determined.  The  danger  points  for  good  will  have 
been  charted,  the  things  not  to  be  experimented  with  are 
recognized,  and  the  principles  of  friendship  with  the  pub- 
lic are  held  inviolable.  It  is  of  infinitely  greater  conse- 
quence for  a  gas,  electric  or  taxicab  company  to  be  able 
to  convince  the  public  that  its  meters  are  honest  and  do 
not  rob  in  terms  of  cubic  feet,  kilowatts  or  miles  traveled 
than  to  parade  some  such  irrelevant  fact  as  that  its 
directors  and  executives  are  respectable  men  and  not 
highwaymen.  Householders  may  never  see  the  president 
of  the  gas  company — he  is  not  a  point  of  contact.  But 
every  consumer  lives  in  the  same  house  with  and  suspects 
his  gas  meter.  More  effective  good  will  advertising  can 
scarcely  be  expected  than  that  of  various  gas  and  electric 
light  companies  which  demonstrates  by  graphic  charts 
just  why  the  meter  works  longer  hours  when  the  sun 
quits  early.  Such  publicity  disarms  complaints. 

Advertising  policy  then  as  a  thing  in  itself  has  a  dis- 
tinct value  in  establishing  a  good  will  or  public  friendli- 
ness, quite  apart  from  that  which  attaches  to  a  business 
or  community  by  reason  of  its  merit  or  intrinsic  desirabil- 
ity. The  advertising,  of  course,  should  be  unmistakably 
linked  to  the  thing  or  business  by  using  an  easily  recog- 
nized means  of  identification  in  all  advertisements  and  in 
connection  with  the  thing  advertised ;  but  the  atmosphere 
of  friendliness  is  often — and  should  never  be — neglected. 
Advertising  policy  can  create  good  will;  it  can  be  cold 
and  sterile,  neither  creating  nor  impairing  friendliness ;  or 
it  can  actually  tear  down  good  will  and  prejudice  the 
public  against  the  thing  advertised. 

120 


PART  III 

DEFENDING  A  BUSINESS  FROM 
UNFAIR  COMPETITION 


CHAPTER  XIII 

HOW  TO  DEAL  WITH 
INFRINGERS 


WHOEVER  imitates  a  trade-mark  has  by  common 
consent  come  to  be  described  as  a  "pirate".  At  the 
time  the  designation  was  first  applied,  it  was  more  or 
less  appropriate.  The  pirate  saw  and  coveted  his  neigh- 
bor's successful  business,  and  like  any  Morgan,  Teach, 
Sharkey,  or  L'Ollonois,  sighting  a  fat  galleon  laden  with 
plate  wallowing  in  the  trade  winds,  homeward  bound 
from  the  Indies,  he  laid  himself  alongside  and  took  what 
he  wanted.  He  counterfeited  marks  and  labels  as  ex- 
actly as  he  could,  not  as  he  dared.  There  was  no  limit 
to  his  impudence.  He  was  deterred  only  by  manual,  not 
by  moral  difficulties. 

Those  who  know  Exquemelin,  Captain  James  Burney, 
and  Stevenson  have  an  idea  of  the  way  in  which  the  real 
pirate  pursued  his  art.  He  performed  in  the  open  and 
spared  none.  His  craft  was  a  topsail  schooner,  the  jolly 
roger  was  hoisted  at  the  peak,  scowling  ruffians  crowded 
the  decks,  singing  "fifteen  men  on  the  dead  man's  chest — 
yo-ho-ho,  and  a  bottle  of  rum !"  They  laid  her  alongside 
the  fated  ship;  cutlasses  between  teeth,  they  swarmed  up 
the  side,  and  then — the  scuppers  ran  blood,  those  who 
survived  the  boarding  walked  the  plank,  the  sharks  were 
fed,  the  galleon,  scuttled  and  burning,  sank,  and  all  that 
was  left  was  the  murky  cloud  aloft  and,  below  the  circling 
gulls,  a  few  eddies,  from  which  rose  curling  wisps  of  bluish 
smoke — and  then  a  week's  debauch  in  Port  Royal  and 
another  foray. 

123 


RESTRAINING     UNFAIR     TRADE 

The  analogy  between  the  commercial  pirate  of  not  so 
many  years  ago  and  the  Spanish  main  variety  was  exact. 
The  foregoing  indicates  briefly  and  without  unnecessary 
harrowing  detail  how  the  real  thing  behaved.  He  was  a 
thief,  of  course,  but  he  was  a  robust  one;  he  risked  his 
hide  every  time  he  did  a  day's  work.  We  all,  even  the 
most  ladylike  of  us,  must  confess  to  a  sneaking  admira- 
tion for  the  pirate  and  the  way  he  did  business.  The 
commercial  Henry  Morgan  also  has  our  grudging  ad- 
miration. He  was  an  unrefined  and  direct-acting  person 
who  conspicuously  lacked  finesse  and  performed  with  a 
valorous  lack  of  concern  for  his  own  safety.  What  he 
wanted  he  appropriated.  His  successful  rival's  trade- 
mark and  label  he  counterfeited.  In  doing  so  he  risked  a 
jail  sentence  or  worse  just  as  his  maritime  colleague 
risked  a  hempen  cravat. 

PUNISHMENT  OF  TRADE  PIRATES  IN  THE  MIDDLE  AGES 

The  punishment  following  a  conviction  of  trade-mark 
counterfeiting  during  the  fourteenth,  fifteenth  and  six- 
teenth centuries  was  the  ferocious  kind  common  at  the 
time.  In  some  places  where  a  particular  industry  flour- 
ished, the  marks  used  in  it  were  protected  by  municipal 
ordinances.  Under  some  of  them  counterfeiters  were 
executed,  in  others  the  pillory  was  the  penalty.  Infringe- 
ment of  trade-marks  was  every  bit  as  hazardous  an  occu- 
pation as  buccaneering,  The  punishment  was  made  to  fit 
the  crime.  The  trade  pirate  got  death,  mutilation  or 
penal  servitude,  and  the  maritime  person,  who  pursued 
piracy,  if  caught,  was  hanged  on  Nix's  mate  and  his 
carcass,  coated  with  tar,  swung  in  an  iron  cage  as  a 
warning  to  evil  doers. 

Piracy  of  the  more  robust  variety  has  disappeared  from 
the  face  of  the  waters,  and  trade-mark  piracy  of  the 
corresponding  type  is  fast  disappearing  from  the  land.  I 
doubt  if  covetousness  is  less  prevalent,  but  piracy  has 
degenerated  in  robustness  of  method.  The  name  pirate 
applied  to  the  poor  creature  who  today  tries  to  steal  his 

124 


ACTION     FOR      INFRINGEMENT 

successful  rival's  business  is  an  utter  misnomer.  His  con- 
duct is  only  comparable  with  the  variety  of  dishonesty 
exemplified  by  the  humble  individual  who  steals  door  mats 
or  picks  pockets.  To  call  the  modern  infringer  a  pirate 
is  to  pay  him  a  compliment  he  does  not  deserve;  he  is  no 
such  hardy  ruffian;  he  is  a  sneak  thief,  a  confidence  man, 
just  as  dishonest,  no  doubt,  as  a  real  man  thief,  but  less 
admirable. 

He  hopes  to  escape  the  penalty  of  his  wrongdoing  by 
craft  and  cunning,  to  deceive  the  public,  and  then,  when 
accused,  also  to  deceive  the  courts. 

The  courts,  of  course,  had  no  difficulty  in  dealing  with 
the  counterfeiter  and  the  real  and  properly  so-called  trade- 
mark pirate.  They  sometimes  were  difficult  to  catch,  but 
when  caught  were  given  a  short  shrift.  The  law,  however, 
is  not  always  so  fortunate  in  overtaking  and  stopping 
the,  more  astute  modern  infringer.  The  courts  are  as  a 
general  thing  about  five  years  behind  the  trade  parasite. 
It  was  only  a  little  over  a  century  ago  that  the  English 
courts  began  to  appreciate  that  the  theft  of  a  man's 
business  was  as  morally  wrong  and  as  legally  indefensible 
as  the  stealing  of  his  purse  or  his  coat,  but  at  last  the 
courts  adopted  this  view  and  punished,  enjoined  or  cast 
in  damages  traders  guilty  of  such  criminal  trade  prac- 
tices. The  notion  that  there  could  be  a  right  in  a  sign 
or  symbol  used  by  a  merchant  was  not  definitely  estab- 
lished in  English  law  until  about  the  time  of  the  Ameri- 
can Revolution.  The  lawyers  of  the  time  had  to  engraft 
this  then  novel  right  on  to  an  existing  system  of  law, 
and  they  cast  about  for  means  of  enforcing  it.  The  neces- 
sity of  proof  of  guilt  beyond  a  reasonable  doubt  made 
the  machinery  of  the  criminal  law  impracticable.  A  suit 
for  damages  was  of  course  useless  against  a  financially 
irresponsible  defendant.  A  court  of  equity  seemed  to  be 
the  only  recourse,  and  as  one  of  its  principles  is  that 
equity  interferes  to  protect  property,  the  lawyers  sought 
for  a  peg  upon  which  a  property  theory  could  be  hung. 
There  was  the  trade-mark  staring  them  in  the  face,  and 
this  they  assumed  was  the  property  of  the  trader  using 

125 


RESTRAINING     UNFAIR     TRADE 

it.  This  assertion  is  of  frequent  occurrence  in  the  cases. 
Use  of  this  trade-mark  by  another  was  thought  to  be  a 
continuing  trespass  upon  the  property  of  the  first  user 
and  the  equitable  remedy  of  injunction  was  invoked 
against  its  continuance. 

This  notion  of  property  in  a  trade-mark  as  a  distinct 
thing  rather  than  that  the  property  is  in  the  good  will 
which  the  trade-mark  symbolizes  has  been  a  tenacious  one 
and  even  now  finds  expression  in  many  of  the  cases. 

The  legal  journey  to  the  conclusion  that  a  trade-mark 
is  property  lasted  well  over  a  century,  and  in  the  mean- 
while infringers  learned  two  things,  that  it  was  unprofit- 
able to  counterfeit  a  rival's  trade-mark  and,  since  the 
courts,  once  they  got  started,  dealt  severely  with  them, 
that  it  was  dangerous. 

HOW  THE  INFRINGER  DEVISED  NEW  WAYS  TO  STEAL  TRADE 

It  was  necessary,  therefore,  for  them  in  some  way  to 
circumvent  the  law,  and  the  infringer,  being  as  ingenious 
as  he  was  unscrupulous,  set  his  wits  to  the  accomplish- 
ment of  this  task.  He  recognized  that  the  courts  as- 
sumed a  trade-mark  to  be  property  and  his  experience 
taught  him  that  it  was  unsafe  to  meddle  with  property, 
therefore  he  let  the  trade-mark  alone.  His  purpose  was 
to  steal  his  successful  rival's  trade,  and  he  was  supremely 
indifferent  as  to  the  manner  of  its  accomplishment.  It  was 
soon  realized  that  trade  could  be  stolen  without  resort 
to  infringement  of  technical  trade-marks,  without  vio- 
lation of  any  then  recognized  property  right.  All  man- 
ner of  contrivances  were  employed, — labels,  packages  and 
the  like,  were  imitated,  which  resulted  in  public  deception 
and  private  injury  without,  it  was  thought,  subjecting 
the  perpetrator  to  legal  liability.  The  lawyers  and  courts 
at  once  found  that  their  property  theory  was  unwork- 
able. Certainly  no  property  could  be  claimed  in  the 
color  of  a  label,  or  in  the  arrangement  of  the  printed 
matter  upon  it,  or  in  the  shape  of  a  bottle,  or  in  any  of 
the  numberless  things  which  help  to  identify  a  particular 

126 


ACTION     FOR      INFRINGEMENT 

man's  goods  and  which  were  being  imitated  for  the  pur- 
pose of  stealing  away  his  customers  and  appropriating 
his  good  will.  It  was  perfectly  clear  that  a  man's  trade 
could  be  taken  away  from  him  unlawfully  and  his  cus- 
tomers deceived  into  purchasing  a  spurious  article,  in 
other  ways  than  by  imitation  of  his  technical  trade-mark, 
and  it  was  a  reproach  to  the  law  and  courts  of  justice 
if  they  would  sit  idly  by  and  see  this  go  on.  To  meet 
this  situation  there  has  lately  developed  a  considerable 
body  of  law  dealing  with  this  class  of  cases  which,  in 
this  country,  for  want  of  a  better  name,  are  called  cases 
of  "unfair  competition"  or  "unfair  trading";  in  Great 
Britain  "passing  off";  in  France  "concurrence  deloyale"; 
and  in  Germany  "unlauter  wettbewerb". 

INFRINGEMENT  AND  UNFAIR  TRADING 

It  seems  to  be  assumed  by  many  that  there  is  some 
radical  distinction  between  a  case  involving  trade-mark 
infringement  and  one  of  unfair  trading.  This  distinction 
is  usually  said  to  be  in  the  supposed  fact,  that  cases  in- 
volving technical  trade-marks  are  based  upon  a  property 
right,  and  cases  of  unfair  trading  upon  fraud.  I  believe 
that  the  distinction  is  wholly  unsound  and  that  there  is 
no  real  difference  except  in  the  matter  of  evidence  be- 
tween a  case  of  unfair  competition  and  technical  trade- 
mark; that  all  trade-mark  cases  are  in  fact  cases  of 
unfair  competition  and  the  law  of  trade-marks  is  a  part 
only  of  the  broader  subject  of  unfair  trade;  that  unfair 
trade  is  the  genus,  trade-mark  infringement  a  species. 

Since  the  trade-mark  is  nothing  but  a  symbol  of  busi- 
ness good  will,  it  is  the  good-will  rather  than  the  trade- 
mark as  an  independent  thing  which  is  property.  The 
trade-mark  is  nothing  but  the  visible  manifestation  of 
this  underlying  property.  The  good  will  is  the  substan- 
tial thing  which  the  law  protects  against  invasion.  The 
recent  development  of  the  law  is  in  the  direction  of  pro- 
tecting business  good  will,  however  it  may  be  represented. 
Good  will  can  be  and  is  symbolized  in  other  ways  than 

127 


RESTRAINING     UNFAIR     TRADE 

by  technical  trade-marks — by  names  which  are  not  trade- 
marks, by  labels,  by  dress  or  get-up  of  goods,  by  the 
form  of  the  goods  themselves,  or  the  style  of  the  enclosing 
package;  in  short,  by  the  numberless  ways  in  which  the 
purchaser  is  enabled  to  recognize  the  particular  article  he 
wants.  Good  will  is,  to  define  it  inexactly,  the  friendli- 
ness which  a  consumer  has  toward  a  particular  article ; 
it  is  that  friendliness  which  induces  him  to  purchase  a 
particular  thing  rather  than  another.  In  order  that  his 
desire  to  buy  this  particular  article  may  be  unobstructed, 
or  in  order  that  it  may  be  exercised  at  all,  it  is  neces- 
sary that  he  be  able  to  distinguish  the  article  that  he 
wants  to  buy  from  other  articles  of  a  similar  kind.  There- 
fore, whatever  it  is  that  enables  the  purchaser  to  pick 
out  the  thing  he  wants  from  other  things  is,  with  the 
purchaser  at  least,  the  symbol  or  visible  embodiment  of 
the  good  will  which  he  has  toward  that  product.  It, 
therefore,  represents  a  thing  of  value  to  the  producer  of 
the  article  toward  which  the  consumer's  friendliness  is 
directed.  To  this  extent  the  consumer's  friendliness  and 
the  probability  of  successive  purchases  on  account  of  it, 
are  rights  of  property  and  are  so  recognized  by  the  courts 
under  the  name  good  will.  A  trade-mark  is  an  identify- 
ing symbol  of  good  will,  but  it  is  obvious  that  there  are 
innumerable  other  things  which  also  serve  as  distinguish- 
ing marks  and  represent  good  will  in  exactly  the  same 
manner.  It  is  equally  clear  that  the  imitation  or  use  by 
others  of  any  one  of  these  numberless  things  would  con- 
fuse the  consumer  and  permit  the  sale  to  him  of  an  article 
which  he  does  not  want,  in  his  belief  that  he  is  getting 
the  article  which  he  does  want,  and  thus  divert  his  pat- 
ronage and  destroy  the  property  of  the  producer  of  the 
genuine  article,  in  the  expectation  of  continued  custom  in 
precisely  the  same  way. 

Whether  or  not  any  particular  element  is  a  thing  which 
enables  one  product  to  be  distinguished  from  another, 
and  hence  symbolizes  the  producer's  good  will,  is  a  matter 
of  evidence,  a  matter  of  fact,  a  question  of  proof,  and 
here,  it  seems  to  me,  is  the  difference  between  cases  of 

128 


ACTION     FOR      INFRINGEMENT 

unfair  competition  and  those  involving  technical  trade- 
marks. 

A  technical  trade-mark  is  an  arbitrary  name  or  device 
attached  to  an  article  of  merchandise  for  the  purpose  of 
indicating  its  commercial  origin.  Being  arbitrary,  it  can 
have  no  function  except  to  identify.  The  presumption, 
therefore,  is  that  it  does  identify,  and  since  it  is  the  iden- 
tifying mark  of  an  article,  use  by  any  one  else  on  another 
article  necessarily  involves  a  false  representation  that  one 
article  is  the  other.  There  can  be  no  excuse  for  its  use 
by  others  because  the  name  or  mark  means  nothing  in- 
trinsically, and  there  can  be  no  purpose  in  it  except  to 
deceive.  Therefore,  all  of  these  things  are  presumed. 

THE  LAW  OF  UNFAIR  COMPETITION 

On  the  other  hand,  where  the  style  of  a  label  is  imi- 
tated, or  the  color  or  get-up  of  a  package,  or  any  other 
of  the  things  aside  from  a  trade-mark  which  serve  to 
identify  a  particular  product  and  distinguish  it  from 
others  is  used  or  imitated,  these  various  things,  not  being 
arbitrary  and  having  a  function  of  utility,  cannot  be  said 
to  identify  a  particular  person's  goods  without  proof 
that  they  do  in  fact  identify.  That  is  to  say,  if  a  man 
puts  a  red  label  about  a  package  of  tea,  there  is  no  initial 
presumption  that  that  label  distinguishes  his  tea  from 
other  people's.  Therefore,  he  must  prove  it  as  a  fact. 
When  he  has  proved  that  as  a  fact  the  red  label  does 
identify  his  tea  and  distinguishes  it  from  other  producers' 
tea,  then  he  is  entitled  to  insist  that  other  people  either 
refrain  from  using  red  labels  on  tea  or  use  them  in  such  a 
way  as  will  not  deceive. 

So,  after  several  hundreds  years'  development,  the  law 
of  unfair  competition  has  been  crystallized  into  a  single 
sentence — *no  one  has  any  right  to  sell  his  goods  as  the 
goods  of  another. 

There  now  is  no  question  of  law  involved  in  these  cases. 
They  are  cases  of  fact.  The  law  is  established,  and  the 
principle  is  perfectly  general  and  without  exception.  No 

129 


RESTRAINING     UNFAIR     TRADE 

one  has  a  right  to  use  any  artifice  or  contrivance  by 
means  of  which  the  sale  of  his  goods  as  a  rival's  is  accom- 
plished either  directly  or  indirectly,  or  will  probably  be 
accomplished  by  dealers  who  purchase  from  him.  Will 
ultimate  purchasers  without  active  and  actual  passing  off 
by  either  the  producer  or  the  retailer  be  likely  to  pur- 
chase the  defendant's  goods  in  the  belief  that  they  are 
the  goods  of  the  complainant?  It  is  of  no  consequence 
whether  the  deception  is  effected  by  imitation  of  trade- 
mark or  name  whether  descriptive,  geographical  or  per- 
sonal, duplication  of  copying  of  device,  label,  color,  de- 
sign or  get-up  of  enclosing  package,  duplication  of  catch- 
words, deceptive  advertising,  oral  misrepresentation, 
silent  passing  off,  or  in  any  other  way.  Is  one  trader, 
directly  or  indirectly,  expressly  or  by  implication,  making 
a  false  representation  that  his  goods  are  those  of  a  rival? 
It  may  be  made  in  any  of  the  myriad  ways  in  which  it  is 
possible  to  convey  impressions.  The  question  in  every 
case  is:  Is  this  false  representation  being  made?  And 
that  question  is  a  question  of  fact. 

Now,  no  lawyer  has  any  cause  for  complaint  when 
clients  do  not  hand  him  their  cases  on  a  silver  platter, 
but  when  people  come  in  and  put  a  carton  or  bottle  or 
what  not  on  his  desk  and  say,  "That's  an  imitation  of 
our  Bird  brand  and  I  want  you  to  stop  it  at  once;  don't 
wait  a  minute;  get  right  after  the  scoundrel" — he  has  a 
grievance.  It  is  simple  enough  to  treat  an  ordinary  com- 
mercial lawsuit  thus  casually — to  tell  a  lawyer  to  collect 
a  past-due  note  or  sue  for  breach  of  contract.  Cases 
such  as  these  may  involve  disputed  law  points,  but  the 
facts  are  generally  simple  and  can  be  ascertained  in  a 
few  minutes. 

Unfair  trade  cases,  contrary  to  the  common  belief,  do 
not  involve  any  complicated  law  points.  There  is  nothing 
mysterious  or  esoteric  about  them.  They  are  cases  of 
fact  and  the  facts  are  spread  over  the  whole  territory 
where  the  goods  of  the  parties  are  sold,  and  it  takes  time 
to  get  them.  Short  of  obvious  and  shameless  counter- 
feiting, the  facts  of  the  cases  are  to  be  found  not  only  in 

130 


ACTION     FOR      INFRINGEMENT 

the  contrasted  labels  or  packages,  but  in  the  stores  of 
the  dealers  who  handle  the  goods. 

The  question  is  a  practical  one :  Are  purchasers  likely 
to  be  deceived?  When  there  is  nothing  to  go  by  but  a 
comparison  of  labels  or  names,  which  more  or  less  resem- 
ble each  other,  one  man's  opinion  is  as  good  as  another's, 
and  cases  started  and  prosecuted  on  such  a  basis  resolve 
themselves  into  nice  little  academic  disputes,  one  side  con- 
tending that  the  resemblances  are  enough  to  fool  people 
and  the  other  maintaining  that  no  one  with  eyes,  ears  and 
common  sense  could  be  deceived  for  an  instant,  and  that 
anyone  who  could  be  fooled  ought  to  have  his  sanity 
inquired  into.  After  an  hour  or  so  of  theoretical  disputa- 
tion, the  court  takes  the  case  under  advisement  and  after 
a  while  writes  a  nice  theoretical  opinion  and  decides  one 
way  or  the  other,  depending  very  largely  on  the  eyesight 
of  the  judge  and  his  capacity  or  incapacity  for  being 
fooled  himself,  and  from  the  record  before  him  no  one 
can  demonstrate  that  he  is  wrong,  whichever  side  he  takes. 

PROVED  INSTANCES  OF  ACTUAL  DECEPTION  HELP  TO 
ESTABLISH  A  CASE  AT  LAW 

This  situation  is  very  largely  due  to  the  fact  that  most 
trade-mark  and  unfair  trade  cases  are  prematurely 
brought  and  without  a  sufficient  preliminary  investiga- 
tion of  the  actual  facts  as  they  are  in  the  trade  and 
among  purchasers.  When  a  complainant  can  go  before  a 
court  fortified  with  a  number  of  cases  of  actual  deception, 
there  is  no  need  of  any  theoretical  argument,  no  necessity 
for  a  discussion  of  probabilities,  whether  deception  is 
likely  to  occur  or  not — it  has  occurred  and  there  is  no 
more  to  be  said.  Proved  cases  of  actual  deception  of 
normal  people  end  all  controversy.  The  argument  that 
there  is  no  likelihood  that  people  will  be  deceived  is  com- 
pletely met  by  proof  that  people  have  been. 

Where  the  imitation  is  inexact  suit  should  not  be 
brought  until  after  the  most  careful  and  painstaking 
investigation  is  made  among  actual  purchasers!  of  the 

131 


RESTRAINING     UNFAIR     TRADE 

alleged  infringing  goods,  to  produce  evidence  of  actual 
deception  and  mistake.  This  evidence  is  difficult  to  get 
and  the  courts  recognize  this  difficulty,  but  it  is  worth  the 
trouble  because  it  transforms  speculation  into  actuality. 
Sometimes  it  turns  up  unexpectedly  and  from  unexpected 
sources. 

I  recall  sitting  around  a  court-room  in  Cleveland  wait- 
ing for  a  case  to  be  called.  There  was  a  trade-mark  case 
being  argued  relating  to  an  alleged  infringement  of  the 
"Inner  Seal"  device  of  the  National  Biscuit  Company. 
There  was  no  evidence  of  actual  deception,  and  counsel 
for  the  defense  naturally  was  making  the  most  of  it.  He 
was  a  good  lawyer  and  much  given  to  fluent  vocalizing, 
and  was  going  on  at  a  great  rate,  treating  the  subject 
with  much  ingenious  pleasantry. 

"My  distinguished  opponent,"  he  said,  "is  asking  this 
court  to  convict  my  client  of  fraud  on  a  supposition.  He 
says  this  little  red  seal  is  calculated  to  impose  on  the 
public.  We  have  been  using  it  openly  and  notoriously  for 
a  year,  and  my  adversary  is  unable  to  produce  a  single 
person  who  will  swear  he  has  been  misled  by  it.  He  has 
had  ample  opportunity  to  bring  in  a  multitude  of  deceived 
purchasers.  He  has  produced  none.  He  says  he  is  under 
no  obligation  to  do  so.  Of  course  he  isn't,  but  don't  you 
suppose  that  if  there  were  any  they  would  have  been 
paraded  before  your  honor?  None  are  produced  because 
there  are  none,  and  this  court  is  asked  to  enjoin  us  and 
brand  our  business  a  fraudulent  one  when  what  we  have 
done  has  not  deceived  a  single  soul — not  only  has  not,  but 
could  not.  No  one  not  an  imbecile  could  be  deceived  by 
this  label.  The  law  is  designed  to  protect  people  with 
faculties  unimpaired,  not  those  with  arrested  mental  de- 
velopment"— and  so  on,  with  much  noise  and  clamor. 

The  judge  listened  patiently  and  immediately  at  the 
close  of  the  argument,  contrary  to  his  usual  practice, 
granted  the  injunction  without  taking  the  case  under  ad- 
visement. 

After  adjournment  we  all  went  into  chambers  to  pay 
our  respects  to  the  court,  and  someone  said:  "Judge, 

132 


ACTION     FOB     INFRINGEMENT 

you  didn't  take  much  time  to  decide  that  biscuit  case." 
"I  should  think  not,"  replied  the  judge;  "I  was  much 
amused  at  the  remarks  of  Mr.  So-and-So.  He  said  that 
no  one  but  an  utter  ass  could  be  fooled  by  his  client's 
label.  If  he  is  right  in  that,  I'm  that  sort  of  person.  I 
was  going  fishing  about  a  month  ago  and  I  took  along 
some  of  his  client's  crackers.  I  bought  them  for  'Unee- 
das'.  The  packages  had  the  little  red  seal  on  the  end. 
They  fooled  me  and  I  guess  they  would  fool  other 
people." 

Miracles  like  this,  however,  do  not  happen  every  day. 
Trade-mark  and  unfair  trade  cases  are  won,  not  on  any 
fine-spun  legal  theories,  but  on  the  facts.  The  best  way 
to  convince  a  court  that  a  thing  is  calculated  to  deceive 
is  to  show  that  it  actually  has  deceived.  The  only  way 
to  get  this  proof  is  to  go  out  among  consumers  and  hunt. 
No  amount  of  time  is  wasted  and  no  labor  useless  which 
shows  deception,  not  as  a  probability  or  a  possibility,  but 
as  a  fact. 

INFRINGEMENT  IS  CONTAGIOUS 

It  must  be  accepted  as  a  fact  that  all  successful  articles 
are  imitated;  that  every  success  breeds  parasites  which 
prey  upon  it;  that  every  trade-mark,  label  or  package 
which  is  advertised  and  which  stands  for  something,  is 
sooner  or  later  infringed.  As  a  matter  of  fact,  the  pro- 
prietor of  a  successfully  advertised  product  must  resign 
himself  to  a  siege  of  infringement  which  he  must  pass 
through.  It  is  a  perfectly  normal  phenomenon.  He  is 
bound  to  have  it  just  as  it  is  a  foregone  conclusion  that 
children  will  have  measles,  whooping-cough  and  chicken- 
pox,  and  he  might  as  well  recognize  it  and  make  appro- 
priations for  the  expense  of  prosecuting  inf ringers  just 
as  he  does  for  insurance  and  taxes.  My  experience  has 
been  that  a  newly  advertised  article  will  be  let  alone  about 
a  year,  or  if  its  success  is  marked,  not  so  long.  Then 
are  hatched  a  swarm  of  imitators  of  different  degrees  of 
effrontery,  but  all  equally  conscienceless  and  all  moved 

133 


RESTRAINING     UNFAIR     TRADE 

by  a  common  purpose,  to  steal  a  part  of  the  successful 
article's  good  will.  This  is  the  common  experience,  and 
sometimes  it  seems  as  if  there  was  no  end  to  the  thieving. 

When  Cascarets  had  been  on  the  market  a  year  or  so, 
there  appeared  "Castorets,"  "Castor  Caramels,"  "Cas- 
torines,"  "Castorolas,"  "Castorinas,"  "Cascaratabs," 
"Cascara  Tablets"  (in  imitated  boxes)  and  the  like.  Hole- 
proof  Hosiery  produced  "Soleproof,"  "Toeproof,"  "Heel- 
Proof,"  "Wear-Proof,"  "No  Hoi"— all  in  yellow  boxes. 
In  the  days  of  the  extensive  advertising  of  Hood's  Sar- 
saparilla  it  seemed  as  if  the  whole  clan  of  Hoods  was 
suddenly  and  with  one  accord  inspired  to  go  into  the 
medicine  business,  and  there  were  "J.  C.  Hood's  Sarsa- 
parilla"  and  "Good's"  and  others,  and  all  used  the  buff 
package  and  peculiar  diagonal  printing  of  the  genuine. 
Paine's  Celery  Compound  inspired  "Payns";  "Stuart's 
Dyspepsia  Tablets,"  "Dr.  Stewart's  Dyspepsia  Tablets". 
A  competitor  of  "Big  Ben"  alarm  clocks  was  so  singu- 
larly lacking  in  ingenuity  that  he  put  out  a  "Big  Bell". 

When  the  General  Arthur  cigar  was  advertised  all  over 
the  country,  the  stock  labels  of  lithographers  were 
searched  for  those  showing  representations  of  distin- 
guished-looking gentlemen  wearing  mutton-chop  whiskers ; 
and  among  others,  Chauncey  Depew  and  the  Duke  of 
Veragua  were  discovered.  They  were  thereupon  chris- 
tened "Prince  Arthur"  and  "Captain  Arthur".  George 
W.  Childs  received  the  same  treatment,  pictures  of  benev- 
olent old  gentlemen  were  labeled  "Roth's  CHILD",  "My 
CHILD"  and  the  like.  The  popularity  of  the  "Tom 
Moore"  cigar  inspired  a  cigar  manufacturer  with  the 
mind  of  a  caterpillar  and  the  morals  of  a  Dick  Turpin 
to  appreciate  a  slight  resemblance  between  the  discoverer 
of  the  anesthetic  effect  of  ether,  Dr.  Thomas  Morton, 
and  the  Irish  bard,  and  promptly  he  put  a  "Tom  Mor- 
ton" cigar  on  the  market.  These  instances  are  not 
sporadic  or  exceptional.  It  is  the  common  experience. 

There  are  two  encouraging  things  about  imitation.  The 
first  is  the  tribute  it  pays  to  the  genuine  for  an  inferior 
and  unpopular  thing  is  never  imitated;  and  the  second 

184 


ACTION     FOR     INFRINGEMENT 

is  that  it  seldom  lasts  long.  Of  course,  infringers  should 
be  vigorously  prosecuted  from  the  very  beginning.  The 
Donnybrook  Fair  injunction,  "When  you  see  a  head,  hit 
it!"  is  sound  doctrine.  An  infringement,  however  seem- 
ingly trivial,  if  let  alone  is  an  encouragement  to  others, 
for  infringement  is  contagious.  There  are  hundreds  of 
potential  infringers  in  every  line  of  business,  and  when 
they  see  that  one  of  their  brethren  with  more  courage 
than  they,  and  who  actually  has  infringed,  is  not  mo- 
lested, it  breeds  a  sense  of  security  and  others  follow. 
Certainly  picking  pockets  would  be  more  generally  prac- 
ticed if  the  gentry  engaged  in  that  occupation  felt  rea- 
sonably sure  that  their  trade  would  not  be  interfered  with 
by  the  police,  and  the  sight  of  one  of  the  fraternity  doing 
business  unmolested  in  plain  sight  of  a  policeman  is  not 
calculated  to  deter  others,  but  the  reverse.  An  infringe- 
ment apparently  acquiesced  in,  is  the  most  potent  breeder 
of  others,  and  the  more  imitations  there  are  the  less  dis- 
tinctive the  original  mark  or  label  becomes. 

DEAL  PROMPTLY  WITH  INFRINGERS 

Any  infringement,  however  trifling  it  may  seem,  ought 
to  be  proceeded  against,  without  any  unnecessary  delay. 
The  mere  fact  that  the  particular  parasite  is  seemingly  not 
worth  powder  and  shot  is  no  reason  for  not  getting  after 
him,  because  of  the  deterrent  effect  on  others,  like  minded 
but  not  so  courageous.  The  trade-mark  proprietor  who 
gets  a  reputation  for  relentless  prosecution  of  all  viola- 
tions of  his  trade  rights,  however  small  the  violation  may 
be,  is  let  alone. 

The  reason  why  the  counterfeiting  of  money  is  so  rare 
in  this  country,  compared  with  some  others,  is  that  it  is 
generally  known  that  the  secret  service  never  lets  up,  and 
that  the  counterfeiter  is  always  landed  sooner  or  later. 
The  same  policy  applied  to  private  brands  has  the  same 
effect.  After  a  number  of  adjudications  have  been  se- 
cured, other  infringers  either  stop  of  their  own  accord,  or 
when  notified. 

135 


RESTRAINING     UNFAIR     TRADE 

And  while  on  the  subject  of  warning  inf ringers  by 
letter,  mj  experience  has  taught  me  that  such  warnings 
are  in  many  cases  unwise.  Where  there  exists  a  reason- 
able ground  for  the  belief  that  an  infringer  is  acting  in 
good  faith — is,  for  instance,  an  innocent  purchaser  of 
counterfeit  goods — of  course,  a  warning  and  an  oppor- 
tunity to  discontinue  voluntarily  before  suit  is  brought  is 
proper  enough  and  should  be  given.  The  same  thing  may 
be  said  when  a  reputable  business  man  seems  to  be  labor- 
ing under  an  honest  but  mistaken  notion  of  his  rights. 
But  in  the  case  of  a  deliberate  and  designed  infringe- 
ment the  best  policy  is  to  proceed  at  once  without  any 
warning — to  shoot  first  and  talk  afterward. 

It  does  not  pay  to  temporize  with  an  infringer.  I 
have  known  of  repeated  instances  where  a  mistaken  idea 
of  business  etiquette  has  prompted  a  letter  of  warning 
to  the  perpetrator  of  an  unmitigated  piracy.  The  result 
always  has  been  that  the  warning  has  shown  the  pirate 
that  his  conduct  is  known  to  the  victim  and  is  objected 
to.  He  then  gets  advice  or  proceeds  without  it,  but  in- 
variably fixes  up  his  labels  and  packages  a  little  so  as 
to  remove  the  most  flagrantly  imitated  features,  or  gets 
another  label  which  is  just  as  objectionable  commercially 
and  morally,  but  is  much  more  difficult  to  reach  legally. 
He  frequently  succeeds  in  transforming  a  clear  infringe- 
ment into  a  legally  debatable  one,  but  actually  more  dan- 
gerous than  the  first  because  more  subtle.  It  is  better 
policy  to  strike  before  any  such  specious  reformation  has 
occurred. 

Inf  ringers  seldom  succeed.  In  the  first  place,  the  fact  of 
imitation  alone  prevents  the  imitator  ever  from  getting 
an  independent  good  will.  If  his  imitation  is  close  enough 
to  lead  purchasers,  without  their  knowing  it,  away  from 
the  genuine,  it  is,  of  course,  close  enough  to  lead  them 
back.  Effective  disguise  never  reveals  the  person  under 
it.  If  it  is  not  effective  and  does  reveal  the  impersonator 
it  is  only  silly.  To  imitate,  quite  apart  from  the  immor- 
ality of  it,  is  not  good  business.  If  the  imitation  article 
is  good  the  imitator  gets  no  credit.  If  bad,  the  imitator 

136 


ACTION     FOR      INFRINGEMENT 

gets  no  blame.  He  is  a  commercial  zero  as  well  as  a 
parasite. 

Infringing  goods  and  business  based  on  their  sale  sel- 
dom succeed  for  another  reason ;  an  imitator  is  usually  a 
person  deficient  in  two  essentials  to  success  —  he  lacks 
brains  and  he  lacks  morals.  If  he  were  possessed  of  the 
rudiments  of  either  he  would  originate  something  of  his 
own  and  not  crib  the  work  of  a  successful  rival.  Imita- 
tion, besides  being  immoral,  is  the  characteristic  of  a 
simian  intellect. 

Moral  considerations  do  not  generally  appeal  to  an 
infringer,  because  he  has  no  morals,  or  they  are  astig- 
matic. It  is  generally  useless  to  argue  with  him  and 
point  out  that  an  imitation  in  proportion  to  its  success 
is  self-destructive,  because  this  implies  a  certain  degree  of 
intelligence  which  usually  is  lacking.  The  only  thing  left 
is  to  sue  him,  and  that  should  be  done  promptly,  vigor- 
ously and  relentlessly.  Then,  and  not  till  then,  will  your 
trade-marks  be  let  alone. 

It  may  now  be  considered  established  that  after  more 
than  a  century  of  struggle  the  law  has  put  all  cases 
of  unfair  competition,  as  that  term  is  now  understood, 
upon  a  common  basis  of  fact.  Is  the  defendant  repre- 
senting his  goods  as  the  goods  of  the  complainant?  If 
he  is  making  this  false  representation  by  any  means,  how- 
ever ingenious,  the  courts  interfere  and  prevent  the  con- 
tinuance of  it  by  restricting  or  enjoining  entirely  the  use 
of  the  efficient  means  by  which  it  is  carried  out.  Without 
attempting  an  exact  classification  or  a  comprehensive 
statement,  because  the  contrivances  of  the  infringer  are 
as  many  and  as  various  as  the  ingenuity  of  the  dishonest 
schemer  can  invent,  the  common  cases  of  unfair  compe- 
tition involve  (1)  the  deceptive  use  of  geographical 
names;  (2)  the  deceptive  use  of  personal  names;  (3)  the 
deceptive  use  of  descriptive  names;  (4)  the  imitation  of 
the  appearance  and  color  of  labels  and  the  dress  of  pack- 
ages; (5)  the  imitation  of  the  form  or  peculiarities  of 
packages  or  the  configuration  or  visual  appearance  of 
the  article  itself;  (6)  the  deceptive  use  of  devices  which, 

137 


RESTRAINING     UNFAIR     TRADE 

while  having  little  physical  resemblance,  will  cause  goods 
to  be  known  in  the  market  by  the  same  name;  (7)  refill- 
ing distinctive  genuine  packages  with  spurious  goods ; 
(8)  oral  false  statements  and  silent  substitution;  (9)  de- 
ceptive advertising;  (10)  the  false  indication  of  geo- 
graphical origin  in  a  reputable  district  or  locality,  and 
the  false  assumption  of  membership  in  associations, 
unions  and  the  like. 

These  will  be  treated  in  turn.  Before  entering  the 
broad  field  of  unfair  competition,  however,  it  will  be  well 
perhaps  briefly  to  discuss  the  narrow  species  of  that 
subject  now  designated  as  trade-mark  infringement. 


138 


CHAPTER   XIV 

WHAT  CONSTITUTES 
INFRINGEMENT 


INFRINGEMENT  of  technical  trade-marks,  as 
well  as  unfair  trading  by  imitation  of  non-trade- 
mark features,  must  be  approached  from  the  point  of 
view  of  the  average  member  of  the  public  of  the  sort 
accustomed  to  purchase  the  goods  involved,  or  as  the 
Courts  have  designated  such  a  person,  "the  unwary  pur- 
chaser". As  was  observed  by  a  distinguished  Federal 
judge  in  a  controversy  over  tobacco  tags: 

The  difference  in  the  trade-marks  of  the  plaintiff  and  defendant, 
in  this  case,  would,  perhaps,  be  at  once  detected  by  the  intelligent 
user  of  tobacco,  looking  for  his  favorite  brand,  just  as  the  man 
of  luxurious  tastes  would  discern  his  favorite  brand  of  champagne. 
But  the  plaintiff  is  entitled  to  protection  if  the  trade-mark  of 
defendant  would  deceive  the  ordinary  purchaser,  purchasing  as  such 
persons  ordinarily  do.  In  this  connection  we  must  not  lose  sight 
of  the  character  of  the  article,  the  use  to  which  it  is  put,  the 
kind  of  people  who  ask  for  it,  and  the  manner  in  which  they  usually 
order  it. 

Similarity,  not  identity,  is  the  usual  recourse  when 
one  seeks  to  benefit  himself  by  the  good  name  of  an- 
other. What  similarity  is  sufficient  to  effect  the  object 
has  to  be  determined  in  each  case  by  its  own  circum- 
stances, and  in  these  days  of  highly  developed  parasitic 
ingenuity  the  infringer  sees  to  it  that  there  is  always 
room  for  argument  as  to  whether  the  resemblance  is  likely 
to  deceive. 

In  a  case  involving  an  imitation  of  the  brandings 
of  Scriven's  Elastic  Seam  Drawers,  the  court  consid- 

139 


RESTRAINING     UNFAIR     TRADE 

ered  the  characteristics  of  the  "unwary  purchaser".     It 
was  said: 

A  purchaser  of  an  article  of  general  use,  which  in  the  course  of 
years  has  come  to  be  known  as  of  superior  quality,  and  recog- 
nized by  certain  catch  words  and  certain  visible  marks,  may  be 
easily  deceived  into  buying  articles  of  inferior  quality,  designated 
by  words  of  similar  signification  and  superficially  resembling  the 
genuine;  for  he  does  not  usually  have  the  opportunity  of  seeing 
the  genuine  and  the  imitation  side  by  side.  He  commonly  has  in 
mind  only  the  characteristic  features  in  the  designation  and  appear- 
ance of  the  article  he  wishes  to  buy,  and  is  exposed  to  imposition 
if  the  imitation,  though  slight,  is  of  those  salient  features,  and  thus 
the  reputation  and  good  will  established  by  years  of  advertising  and 
production  of  articles  of  superior  quality  will  be  frittered  away, 
if  inferior  goods,  sufficiently  resembling  the  genuine  to  be  mistaken 
for  them,  are  put  on  the  market  and  readily  sold  as  and  for  the 
genuine.  The  imitation  goods  may  not  be  identical  in  any  one 
feature,  but,  if  similar  in  all  and  designated  by  similar  marks  and 
similar  catch  words,  the  sale  should  be  enjoined,  or  the  imitation, 
permitted  only  under  such  limitations  as  will  prevent  misappre- 
hension on  the  question  of  its  real  character,  and  so  differentiated 
that  the  public  will  not  be  imposed  on  or  the  complainant  defrauded. 

The  question  is  one  of  resemblances,  not  differences. 
A  test  applied  only  after  the  deviations  have  been 
pointed  out  favors  the  counterfeit.  In  considering  these 
cases  it  must  not  be  forgotten  that  the  purchaser  of 
goods,  with  respect  to  brands  by  which  the  goods  are 
designated,  is  not  bound  to  exercise  a  high  degree  of 
care.  A  specific  article  of  approved  excellence  comes 
to  be  known  by  certain  catch  words  easily  retained  in 
memory,  or  by  a  certain  picture  which  the  eye  readily 
recognizes.  The  purchaser  is  required  only  to  use  that 
care  which  persons  ordinarily  exercise  under  like  cir- 
cumstances. He  is  not  bound  to  study  or  reflect;  he 
acts  upon  the  moment.  He  is  without  the  opportunity 
of  comparison.  It  is  only  when  the  difference  is  so 
gross  that  no  sensible  man,  acting  on  the  instant,  would 
be  deceived,  that  it  can  be  said  that  the  purchaser  ought 
not  to  be  protected  from  imposition.  Indeed,  some 
cases  have  gone  to  the  length  of  declaring  that  the  pur- 
chaser has  a  right  to  be  careless,  and  that  his  want  of 
caution  in  inspecting  brands  of  goods  with  which  he 

140 


PROOF     OF      INFRINGEMENT 

supposes  himself  familiar,  ought  not  to  be  allowed  to 
uphold  a  simulation  of  a  brand  that  is  designed  to  work 
a  fraud  upon  the  public.  However  that  may  be,  the 
imitation  need  only  to  be  slight  if  it  attaches  to  what 
is  most  salient,  for  the  usual  inattention  of  a  purchaser 
renders  a  good  will  precarious  if  exposed  to  imposition. 

The  rights  and  duties  of  the  unwary  purchaser  may 
be  summarized  from  the  decisions.  He  is  not  bound 
to  make  comparisons  betM'een  labels  or  brands  and  has 
usually  no  opportunity  to  do  so.  He  is  likely  in  making 
his  purchase  to  act  hurriedly,  and  is  not  bound  to  study 
or  reflect,  to  analyze  labels  or  packages,  or  to  read  or 
examine  them.  He  is  not  bound  to  remember  more  than 
the  general  features  of  a  mark,  brand  or  label  and  is 
not  expected  to  have  in  mind  the  details.  He  is  not 
supposed  to  know  that  imitations  exist,  and  the  courts 
recognize  that  he  has  not  had  the  experience  of  an 
equity  judge  in  analyzing  the  elements  which  make  up 
the  general  appearance  of  a  package. 

There  can  be  no  just  criticism  that  the  rule  of  law 
as  announced  by  the  courts  is  not  a  liberal  one,  the 
difficulty  is  in  its  application  to  particular  cases.  About 
the  only  way  to  get  an  accurate  idea  of  what  is  an  in- 
fringement is  not  to  attempt  to  solve  the  problem  by 
general  rules,  but  to  study  other  problems  which  have 
been  answered  by  the  courts. 

When  a  trade-mark  consists  of  a  word,  it  is  infringed 
by  the  use  of  the  same  or  a  like  word,  whether  alone 
or  coupled  with  other  words,  and  whether  on  an 
imitated  or  differentiated  package.  This  is  a  liberal 
and  proper  rule  and  arises  from  the  fact  that  a  trade- 
mark name  differs  from  a  trade-mark  device  in  that 
it  appeals  to  two  senses,  hearing  as  well  as  sight.  The 
deceptive  effect  of  an  imitated  name  is  two-fold.  It  is 
a  confusing  sound  as  well  as  a  confusing  picture.  One 
purchaser  may  rely  on  the  way  it  sounds  when  spoken, 
another  on  the  way  it  appears  when  printed  on  a  label. 
A  distinct  label  in  connection  with  an  imitated  name 
may  warn  a  person  familiar  with  the  appearance  of  the 

141 


RESTRAINING     UNFAIR     TRADE 

name  plus  its  accustomed  accessories,  but  a  different 
dress  of  package  or  the  coupling  with  other  words  is 
no  protection  to  a  purchaser  who  knows  the  name 
through  advertising  or  recommendation,  and  does  not 
know  what  the  genuine  package  is  like.  This  condition 
of  things  the  courts  recognize,  and  in  deciding  cases 
involving  word  marks  consider  the  resemblance  in  sound, 
sight  and  suggestion  of  the  words  before  them. 

As  an  example  of  the  application  of  this  rule,  on  page 
149  is  shown  a  reproduction  of  the  front  of  the  well- 
known  Gold  Dust  Washing  Powder  package  of  N.  K. 
Fairbank  Co.  The  use  of  the  words  "Gold  Drop"  in 
connection  with  a  washing  powder  produced  by  Luckel, 
King  &  Cake  Soap  Co.  on  a  package  which,  as  shown 
by  the  following  illustration,  was  in  appearance  quite 
distinct  from  the  Gold  Dust  package,  was  held  to  be 
unlawful. 

The  court  observed: 

It  is  claimed  that  the  respondent's  packages  are  to  the  eye  unlike 
complainant's.  Admit  it.  *  *  *  How  about  the  stranger  who 
knows  nothing  about  the  packages  or  of  the  labels,  but  has  read 
the  advertisement  and  remembers  the  name  "Gold  Dust"?  Is  it 
not  fair  to  assume  in  a  case  like  this  that  a  decided  majority  of  the 
purchasers  would  not  ask  for  a  specific  size  of  a  package  with  a 
certain  designated  label?  Would  they  not  call  for  the  article  by 
name?  It  must  be  constantly  borne  in  mind  that  there  are  two 
kinds  of  trade-marks,  one  of  peculiar  pictures,  labels,  or  symbols; 
the  other  in  the  use  of  a  name.  *  *  *  The  imitation  of  the  name 
"Gold  Dust"  by  which  the  soap  or  washing  powder  of  complainant 
was  known,  would  constitute  an  infringement,  because  purchasers 
would  be  liable  to  be  misled  who  had  no  knowledge  of  the  article 
except  the  advertised  name  as  being  the  best  soap  or  washing  powder 
in  the  market.  It  is  not  unusual  for  a  certain  specific  article 
advertised  extensively,  of  reputed  excellence,  to  become  publicly 
known  and  called  for  by  the  name  which  is  more  readily  retained 
in  the  memory. 

The  following  word  marks  have  been  held  to  infringe 
as  words  simply  and  independently  of  their  surround- 
ings and  accomplishments: 

Cocoaine  Cocoine,  G.  F.  G.  &  F.,  Moxie  Noxie,  Celluloid  Cellonite, 
Sanitas  Condi-Sanitas,  Maizena  Maizharina,  Sweet  Caporal  Sweet 
Coronal,  Electro  Silicon  Electric  Silicon,  Leopoldshall  Leopold  Salt, 

142 


PROOF     OF     INFRINGEMENT 

Cocoatina  Cacoatine,  Cottoline  Cottoleo,  Momaja  Mo  Java,  Cuticura 
Curative,  Cuticura  Cutis-Cure,  Cuticura  Curato,  German  Sweet 
Chocolate  Germania  Sweet  Chocolate,  German  Sweet  Chocolate  Sweet 
German  Chocolate,  Pride  of  Syracuse  Hier  &  Aldrich's  Pride,  Payson, 
Dunton  &  Scribner's  National  System  of  Penmanship  Independent 
National  System  of  Penmanship,  El  Destino  El  Devino,  El  Destine  El 
Destinacion,  Apollinaris  Apollinis,  Apollinaris  London  Apollinaris, 
La  Flor  de  Margaretta  Margarita,  Trafford  Stafford,  Fort  Fortress, 
Wamsutta  Wamyesta,  Bovina  Boviline,  Tonge's  Tung's,  Sapolio, 
Sapia,  Sapolio  Saponit,  Sapolio  Sapho,  Sapolio  Sapono,  Chatterbox 
Chatterbook,  Nitedals  Medals,  Pearl  Pirle,  Home  Home  Delight,  Sun- 
light American  Sunlight,  Old  Crow  White  Crow,  Vitae-Ore  Vitalizing 
Ore,  Cascarets  Castorets,  Cashmere  Bouquet  Violets  of  Cashmere, 
Uneeda  Iwanta,  Six  Little  Tailors  Six  Big  Tailors,  Demon  Demotic, 
National  Police  Gazette  United  States  Police  Gazette,  Derwent  Derby, 
Rising  Sun  Stove  Polish  Rising  Moon  Stove  Polish,  Job  Joe,  Job  Jop, 
The  Excelsior  White  Soft  Soap  Bustard  &  Co.'s  Excelsior  White  Soft 
Soap,  Universal  Universe,  Royal  Baking  Powder  Royalty  Baking 
Powder,  Royal  Loyal,  Vulcan  Vulture,  Germ  Germea,  Clipper  Brand 
Clipper  City  Brand,  Sorosis  Sartoris,  Gold  Dust  Gold  Drop,  Emollio 
Emolline,  Pride  of  Rome  Pride  of  the  Home,  El  Falcon  El  Falco, 
Robert's  Parabola  Needles  William  Clark  &  Sons'  Parabola  Needles, 
Cream  Baking  Powder  Star  Cream  Baking  Powder,  White  Rock  High 
Rock,  White  Rock  Beacon  Rock,  Eureka  Ammoniated  Bone  Super- 
phosphate of  Lime  Baltimore  Eureka  Ammoniated  Bone  Superphos- 
phate of  Lime,  The  American  Girl  The  American  Lady,  Dr.  Fahrney's 
Alpenkrauter  St.  Bernhard  Alpenkrauter,  Black  Crook  Black  Rook, 
Hunyadi  Janos  Uj  Hunyadi,  LaFlor  de  Habanas  L  Flora  de 
Cubanas,  Club  Black  Enamel  Hub  Black  Enamel,  Monopol  North 
Pole,  C.  B.  C.  B.  D.  C.  B.  &  Co.,  Honeymoon  Honycomb,  Ky's 
Criterion  Ky's  Credential,  Yusea  U.  C.  A.,  Muralo  Murrilo,  Keep 
Clean  Sta-Kleen,  Beats-all  Knoxall,  Chantecler  Chanteclair,  Auto 
Sweet  Chocolate  Chocolate  Auto-Noisettes,  Creamalt  Crown  Malt, 
G.  B.  D.  J.  B.  D.,  Comfort  Home  Comfort,  Limetta  Limette,  Old 
Mill  Soap  Old  Stone  Mill  Soap,  Club  Cocktails  Outing  Club 
Cocktails,  B.  S.  A.  B.  A.  S.,  The  Model  The  Medal,  Seccotine 
Securine,  Georgia  Coon  New  Coon,  Ceresota  Cressota,  Ceresota 
Certosa,  Old  Homestead  New  Homestead. 

So  that  an  imitated  name  may  be  seen  in  its  native 
habitat,  on  page  207  are  contrasted  the  exhibits  in  a 
recent  case  brought  by  the  American  Lead  Pencil  Co. 
to  enjoin  the  use  of  the  word  "Knoxall"  on  the  ground 
that  it  was  an  infringement  of  the  "Beats  All"  brand  of 
pencils. 

The  defendant's  brand  was  held  to  be  an  infringe- 
ment, not  only  because  of  its  resemblance  to  the  com- 

143 


RESTRAINING     UNFAIR     TRADE 


plainant's  when  appealing  to  the  eye  or  ear  of  the  pur- 
chaser, but  also  because  the  similarity  between  the  two 
phrases  in  their  suggestion  would  readily  lead  to  con- 
fusion in  the  minds  of  customers. 

There   is    little    use    in    theorizing    on    this    aspect    of 
trade-mark  infringement.     A  description  of  a  cow  to  a 


man  who  had  never  seen  one  would  not  give  him  much 
of  an  idea  of  what  a  cow  looks  like.  It  is  futile  to 
attempt  to  describe  devices,  so  I  shall  content  myself 
with  showing  a  few  illustrations  of  devices  that  have 
been  held  to  infringe. 


T/he  trade-mark  of  Enoch  Morgan's  Sons  Comp'any 
was  held  to  be  infringed  as  shown  near  the  middle  of  page 
179,  the  court  remarking: 

In  th»  pictorial  marks  there  is  no  difference,  except  that  appellee 
has  substituted  a  young  woman's  face  for  a  young  man's. 

144 


PROOF     OF     INFRINGEMENT 

The  infringer  rarely  has  the  hardihood  to  make  a  Chinese  copy. 
In  respect  to  both  of  these  marks,  if  greater  similarity  were  required 
to  establish  infringement,  nothing  short  of  identity  would  suffice. 

The  second  of  the  trade-marks  for  malt  on  the  oppo- 
site page  was  held  to  infringe  the  first. 

The  Upper  Assam  Tea  Company,  whose  trade-mark 
for  tea  was  the  picture  of  an  elephant,  succeeded  in 
restraining  E.  Herbert  &  Co.  from  the  use  of  a  mark 
containing  the  figure  of  an  elephant  as  shown  in  the 
third  and  fourth  illustrations. 

One  of  the  distinguished  English  judges,  who  held 
that  the  defendant  had  infringed,  thus  expressed  his 
views : 

It  is  to  be  borne  in  mind  that  the  purchaser  of  tea  has  not  these 
two  marks  before  him  so  as  to  be  able  to  compare  the  one  with 
the  other.  He  wants  tea,  and  it  seems  to  me  that  he  might  very 
easily  be  misled.  I  think  the  similarity  is  such  that,  having  regard 
to  the  fact  that  the  two  marks  are  not  before  him,  it  is  calculated 
to  deceive  the  unwary  buyer. 


145 


CHAPTER  XV 

DECEPTIVE  USE  OF  PLACE 
NAMES 


/GEOGRAPHICAL  NAMES  are  not  recognized  as 
VJ  trade-marks,  because  from  their  very  nature  an  ex- 
clusive right  in  them  cannot  and  ought  not  to  be  main- 
tained. To  permit  a  single  trader  to  exclude  every 
other  from  the  use  of  a  place  name  would  handicap 
those  who  might  legitimately  be  doing  business  in  that 
place  in  informing  the  public  of  the  factv  It  was,  how- 
ever, very  early  recognized  that  to  hold  that  no  rights 
could  be  acquired  in  the  name  of  a  place  would  open 
the  door  to  deception  of  the  public  in  a  way  that  the 
judicial  conscience  could  not  tolerate.  It  was  appre- 
ciated that  the  names  of  many  places  by  common  usage 
had  also  become  the  means  of  distinguishing  the  goods 
of  certain  producers  from  those  of  others.  Present  day 
illustrations  readily  occur  to  anyone — "Elgin"  watches, 
"Waltham"  watches,  and  many  others.  The  name 
"Elgin"  on  a  watch  dial  has  little  geographical  sig- 
nificance; it  means  the  product  of  the  Elgin  National 
Watch  Company.  To  the  extent  that  a  place  name  may 
have  obtained  such  an  artificial  significance,  it  is  said 
to  have  acquired  a  secondary  meaning. 

A  man  who  does  business  in  a  certain  locality  and  first 
uses  the  place  name  as  a  trade  name  acquires  certain 
rights  with  respect  to  it.  He  has  a  right  in  the  name 
of  the  place  to  the  extent  of  insisting  that  when  others 
who  may  afterward  establish  themselves  there  use  the 
place  name  in  connection  with  their  business,  they  do  so 

146 


DECEPTIVE     PLACE     NAMES 

only  to  indicate  that  they  also  do  business  there,  and  not 
use  it  merely  as  a  device  to  steal  away  the  customers  of 
the  establishment  which  has  given  the  name  of  the  place 
a  value  independently  of  its  value  as  a  means  of  desig- 
nating a  certain  locality.  Use  of  the  place  name  in  its 
primary  or  geographical  significance  by  people  doing 
business  there  is  fair  and  legitimate.  Use,  however, 
when  the  result  is  confusion  of  identity  of  business  is 
unfair  and  illegitimate.  Two  and  perhaps  three  dis- 
tinct rights  have  to  be  reconciled  in  such  a  case:  the 
right  of  the  original  user  of  the  name  to  the  business 
that  he  has  built  up  under  it;  the  right  of  the  new 
comer  honestly  to  go  to  the  place  and  establish  a  busi- 
ness there  and  to  state  the  fact  of  its  location,  and 
the  right  of  the  public  to  purchase  an  article  desired 
without  deception.  The  latest  comer  will  therefore  be 
required  so  to  use  the  name  as  not  to  injure  the  original 
user  or  mislead  the  public. 

IN  DETERMINING  THE  RIGHT  TO  A 
GEOGRAPHICAL  NAME 

The  situation  at  Waltham  illustrates  the  difficulties 
which  confront  the  courts  in  solving  such  problems.  The 
American  Waltham  Watch  Company  for  many  years 
was  the  only  watch  factory  at  Waltham.  It  designated 
its  product  "Waltham  Watches".  A  Waltham  watch 
to  the  public  meant  the  product  of  the  American 
Waltham  Watch  Company.  The  geographical  signifi- 
cance of  the  name  was  entirely  secondary.  The  defend- 
ant came  to  Waltham  and  established  a  factory  there. 
This,  of  course,  it  had  a  right  to  do.  It  put  the  name 
"Waltham"  on  its  watches.  No  one  would  deny  that 
it  had  a  right  to  indicate  to  the  public  where  its  product 
was  made.  The  result,  however,  was  that  the  defend- 
ant's watches  were  sold  as  "Waltham"  watches  and 
were  thought  to  be  the  complainant's  product.  The 
public  was  deceived  and  the  complainant  injured.  Mr. 
Justice  Holmes,  then  Chief  Justice  of  the  Supreme  Court 

147 


RESTRAINING     UNFAIR     TRADE 

of   Massachusetts,   discussed   the   question   in   his   usual 
lucid  way: 

Whatever  might  have  been  the  doubts  some  years  ago,  we  think 
that  now  it  is  pretty  well  settled  that  the  plaintiff,  merely  on  the 
strength  of  having  been  first  in  the  field,  may  put  later  comers  to 
the  trouble  of  taking  such  reasonable  precautions  as  are  commercially 
practicable  to  prevent  their  lawful  names  and  advertisements  from 
deceitfully  diverting  the  plaintiff's  custom.  *  *  *  It  is  desirable 
that  the  plaintiff  should  not  lose  custom  by  reason  of  the  public 
mistaking  another  manufacturer  for  it.  It  is  desirable  that  the 
defendant  should  be  free  to  manufacture  watches  at  Waltham  and 
to  tell  the  world  that  it  does  so.  The  two  desiderata  cannot  both  be 
had  to  their  full  extent,  and  we  have  to  fix  the  boundaries  as  best 
we  can.  On  the  one  hand  the  defendant  must  be  allowed  to  accom- 
plish its  desideratum  in  some  way,  whatever  the  loss  to  the  plaintiff. 
On  the  other,  we  think  the  cases  show  that  the  defendant  fairly 
may  be  required  to  avoid  deceiving  the  public  to  the  plaintiff's 
harm  so  far  as  is  practicable  in  a  commercial  sense. 

It  was  thought  that  the  name  "Waltham"  on  the 
dial  was  not  important  in  a  geographical  sense,  and 
this  use  of  the  name  by  the  defendant  was  enjoined,  and 
it  was  further  decreed  that  there  should  be  an  injunc- 
tion "against  the  use  by  the  defendant  of  the  words 
'Waltham,  Mass.'  upon  the  plates  of  its  watches  with- 
out some  accompanying  statement  which  would  clearly 
distinguish  its  watches  from  those  manufactured  by  the 
plaintiff,  such  as  'not  the  original  Waltham  Watch  Com- 
pany' or  some  similar  explanatory  statement". 

In  such  a  case,  in  order  to  succeed,  the  complainant 
must  show  (1)  that  the  place  name,  by  use  on  his  goods, 
has  come  to  be  the  means  by  which  they  are  identified, 
and  (2)  that  his  competitor  is  using  the  name  on  his 
goods  so  as  to  deceive  purchasers.  These  of  course  are 
questions  of  fact.  The  extent  of  the  restraint  imposed 
depends  upon  the  strength  of  the  proof  of  these  two 
things  and  ranges  from  prohibited  use,  except  with  such 
explanations  or  distinctions  as  will  prevent  deception 
or  minimize  it  consistently  with  the  rights  of  the  parties, 
to  entire  prohibition  when  it  is  clear  that  all  distinc- 
tions, even  if  honestly  meant,  would  be  idle.  In  the 
Waltham  case  it  was  evident  that  the  court  thought 

148 


A  Kalamazoo  company  adopted  the  label  shown  in  Hie  upper  right-hand  corner 

.'i ml  was  restrained  by  a  Chicago  company  whose  label  adjoins.     "Gold  Drop"  is 

unlawful  when  applied  to  a  washine-powder.  The  beer  label  at  the  right  infringed 

on  the  one  at  the  left 


DECEPTIVE     PLACE     NAMES 

that,  since  the  defendant  actually  was  making  its 
watches  in  Waltham,  it  had  rights  which  had  to  be 
conserved.  On  the  other  hand,  where  the  use  of  the 
name  of  a  town  is  nothing  but  a  pretext  for  unfair 
trading,  the  injunction  against  the  use  of  the  name  is 
absolute. 

This  is  illustrated  by  the  case  of  the  Gage-Downs 
Company,  manufacturers  of  corsets.  Many  years  ago 
they  adopted  as  a  trade  name  the  words  "Chicago  waist" 
and  used  it  on  the  label  shown  at  the  upper  left  hand  on 
page  149. 

The  corset  acquired  a  wide  reputation  and  was  identi- 
fied, spoken  of  and  asked  for  at  stores  by  the  name 
"Chicago  Waist".  People  so  asking  expected  to  get 
Gage-Downs'  product.  The  defendants  were  engaged 
in  business  in  Kalamazoo  and  not  in  Chicago,  and  put 
upon  the  market  a  similar  waist  with  the  label  shown 
at  the  right  on  the  same  page. 

The  court  was  not  called  upon  to  reconcile  the  de- 
fendant's right  to  use  the  word  "Chicago"  as  an  ad- 
dress with  the  complainant's  right  to  the  benefit  of  the 
reputation  it  had  built  up  under  the  name.  Not  being 
in  Chicago,  but  in  Kalamazoo,  the  defendant  obviously 
had  no  right  in  the  name  "Chicago"  as  an  address, 
and  an  absolute  injunction  was  granted. 

Cases  of  this  kind  are  much  less  embarrassing  and 
difficult  where  neither  party  is  using  a  place  name  in 
a  geographical  sense,  or  where  the  defendant  is  not  at 
the  place,  the  name  of  which  he  is  using. 

Probably  few  people  who  are  familiar  with  Bud- 
weiser  Beer  associate  it  with  the  obscure  Bohemian 
town  of  Budweis,  but  recognize  the  name  as  the  desig- 
nation of  a  specific  product  of  the  Anheuser-Busch 
Brewing  Association,  having  not  the  slightest  geographi- 
cal significance.  A  Milwaukee  brewer  put  upon  the 
market  a  beer  which  he  called  "Original  Milwaukee  Bud- 
weiser".  The  labels  of  the  parties  are  reproduced  at  the 
bottom  of  page  149. 

It  was  held  that  the  name  "Budweiser"  did  not  indi- 

151 


RESTRAINING     UNFAIR     TRADE 


cate  geographical  origin  and  as  used  was  not  a  place 
name,  and  since  the  defendant  was  not  using  the  name 
as  indicative  of  the  locality  of  its  business  and  the  con- 
tention that  there  was  a  process  of  brewing,  originat- 
ing in  Budweis,  known  as  the  "Budweiser  Process",  hav- 
ing broken  down,  it  was  held  that  the  use  of  the  name 
"Budweiser"  by  the  defendant  was  not  necessary  or 
proper  as  a  description  of  its  beer  either  as  to  origin 
or  method  of  brewing,  and  that  its  use  amounted  to 
unfair  competition  and  should  be  enjoined. 

It  is  well  recognized  at  the  present  time,  though  there 
are  some  earlier  cases  to  the  contrary,  that  the  manu- 
facturer of  a  product  in  a  certain  district  has  a  right 
as  against  a  person  not  manufacturing  in  that  district 
to  the  use  of  the  name  of  the  district.  That  is  to  say, 
a  person  who  is  rightly  and  truthfully  using  the  geo- 
graphical designation  of  a  locality  from  which  his  prod- 
uct comes  has  a  right  to  stop  outsiders  from  the  false 
use  of  the  name.  The  Anheuser-Busch  Brewing  Com- 
pany succeeded  in  stopping  another  brewer,  not  located 


24V4  Ite. 

WASHM- CROSBY  COS 

BEST 


in  St.  Louis,  from  the  use  of  the  words  "St.  Louis"  on 
beer  brewed  elsewhere.  Blackwell  succeeded  in  stopping 
a  person,  not  located  in  Durham,  from  selling  Durham 
Smoking  Tobacco.  A  manufacturer  of  cement  in  Akron, 
Erie  County,  New  York,  stopped  a  producer  near  Syra- 
cuse from  using  the  word  "Akron"  on  cement  not  pro- 
duced in  Akron,  and  in  one  of  the  most  famous  cases 

152 


DECEPTIVE     PLACE     NAMES 


in  the  books,  the  flour  millers  of  Minneapolis,  suing  on 
behalf  of  themselves  and  all  the  millers  in  Minnesota, 
enjoined  a  Chicago  grocer  from  selling  flour  milled  in 


BEST 


lWLNlj> 

Mm  COMPANY 


BEST 

rtVfl*.'  VW" 
tSffi  .Kan 


BEST 


Milwaukee  under  a  brand  containing  the  words  "Minne- 
sota Patent,  Minneapolis,  Minn.,"  on  the  ground  that 
both  designations  were  false  and  tended  directly  to 


. 

BEST 

MINNESOTA  PATENT 


BEST 


injure  the  good  name  of  the  localities  where  the  com- 
plainants were  located  and  which  they,  and  others  sim- 
ilarly situated,  alone  had  the  right  truthfully  to  use. 
Specimens  of  some  of  the  complainant's  brands,  show- 
ing the  use  of  the  name  "Minneapolis"  are  shown  in 
the  first  four  illustrations,  and  the  defendant's  brand, 
which  was  held  to  be  deceptive  and  enjoinable,  is  shown 
in  the  fifth. 

It  is  only  where  both  parties  to  the  controversy  are 
using  the  place  name  as  an  indication  of  locality  that 

153 


RESTRAINING     UNFAIR     TRADE 

much  difficulty  arises  in  these  cases,  and  this  question 
is  sometimes  made  additionally  difficult,  because  the 
contention  is  made,  and  not  infrequently  sustained,  that 
the  defendant  is  not  in  good  faith  located  in  the  town, 
the  name  of  which  he  is  using  and  which  has  been  made 
famous  by  another. 

In  an  interesting  case  brought  by  the  Elgin  National 
Watch  Company  against  certain  defendants,  who  were 
residents  of  Iowa,  this  state  of  facts  appeared.  The 
defendants  had  been  engaged  for  a  number  of  years  in 
the  assortment  jewelry  business.  Apparently  casting 
about  for  a  town  in  which  to  establish  their  business, 
or  part  of  it,  they  selected  Elgin  because,  as  was  stated 
in  a  letter  from  one  of  them,  which  was  in  evidence  in 
the  case,  "it  is  a  town  with  the  finest  reputation  of  any 
in  the  United  States  on  account  of  the  fact  that  the 
Elgin  watch  is  manufactured  there.  It  is  well  adver- 
tised in  every  hamlet  from  one  end  of  the  country  to 
the  other.  You  will  find  no  dead  wood  lying  around  as 
a  result  of  the  ravage  of  any  scheme  from  Elgin."  They 
thereupon  attempted  to  incorporate  as  the  Elgin  Jewelry 
Company  under  the  laws  of  Illinois,  and  opened  an  of- 
fice in  Elgin  in  the  Young  Men's  Christian  Association 
Building,  where  they  put  a  young  woman  in  charge. 
No  business  was  conducted  there.  It  was  a  mail  sta- 
tion simply.  Mail  coming  there  addressed  to  the  Elgin 
Jewelry  Co.  was  answered  by  form  letters  where  pos- 
sible, otherwise  it  was  forwarded  to  Iowa,  where  it  was 
answered,  sent  back  to  Elgin,  and  there  mailed  so  as 
to  bear  the  Elgin  post  mark.  Swarms  of  traveling  sales- 
men were  sent  out  through  the  country,  registering  at 
hotels  from  Elgin,  and  calling  on  the  trade.  They 
attempted  to  sell  assortments  of  cheap  jewelry.  Their 
selling  talk,  as  related  in  his  own  language  by  one  of 
the  witnesses  in  a  lawsuit  which  followed,  was  about 
as  follows: 

McCarthy  introduced  himself  as  the  salesman  for  the  Elgin  Jewelry 
Company  and  said  that  he  was  doing  business  really  for  the  Elgin 
National  Watch  Co.;  that  we  had  a  chance  to  do  business  with  a 

154 


DECEPTIVE     PLACE     NAMES 

wonderfully  fine  concern  such  as  I  had  not  seen  for  a  long  time.  He 
opened  up  his  samples  of  jewelry  and  told  me  the  low  prices.  I 
then  said,  "It  was  a  wonderfully  low  price;  how  can  you  sell  them 
so  cheaply?"  He  said,  "I  will  tell  you,  Mr.  Werner;  formerly  we 
threw  away  the  scraps  after  making  the  movements  of  the  watches; 
now  we  utilize  them  in  making  jewelry  of  them.  What  formerly 
went  to  waste  we  now  use  and  that  is  why  we  can  make  and  sell 
jewelry  at  less  than  half  price."  "Is  that  possible?"  I  said.  "I  had 
no  idea  that  the  Elgin  National  Watch  Co.  manufactured  jewelry." 
He  said,  "Yes,  that  in  fact  the  president  of  the  Elgin  National 
Watch  Co.  is  president  of  the  Elgin  Jewelry  Co.  and  the  Elgin 
Jewelry  Co.  is  under  the  same  management  as  the  Elgin  Watch  Co. 
In  fact  you  are  doing  business  with  the  Elgin  National  Watch  Co." 
I  said,  "If  that  is  the  case  and  everything  is  as  you  represent  it,  I 
will  give  you  an  order."  He  said,  "Yes,  here  is  a  contract."  I 
thought  it  was  queer;  I  said,  "I  am  dealing  with  the  Elgin  National 
Watch  Co.?"  He  said,  "Yes,  most  assuredly."  I  said  "Well,  then 
I  will  take  the  goods."  I  signed  what  he  called  the  contract. 

The  first  conversation  with  McCarthy  was  on  December  3,  1903. 
He  told  me,  after  mentioning  his  name,  "I  represent  the  Elgin 
Jewelry  Company  and  will  give  you  a  chance  to  buy  goods  such 
as  you  have  never  had  before."  I  said  I  did  not  want  to  buy  any 
goods.  He  said,  "Won't  you  buy  goods  when  you  can  deal  with 
such  a  concern  as  the  Elgin  National  Watch  Co.?"  I  said,  "Yes,  I 
would  be  glad  to."  He  talked  and  showed  the  samples  to  me. 

Before  I  signed  the  contract  McCarthy  told  me,  "I  want  you  to 
understand  that  the  president  is  a  very  pleasant  man  and  it  will 
interest  you  very  much  to  come  and  see."  Then  he  asked  me,  "Have 
you  ever  been  through  the  Elgin  National  Watch  Company's  plant?" 
I  said,  "No."  Then  he  said,  "I  would  invite  you  to  come  out  to 
our  plant  and  examine  it,  and  I  will  introduce  you  to  the  president 
of  the  company,  who  is  a  very  pleasant  man  and  you  will  have  the 
finest  reception  you  ever  had  in  your  life."  "Would  that  be  the 
president  of  the  "Elgin  National  Watch  Co.?"  He  said,  "Yes,  the 
finest  man  you  ever  met."  I  asked  him  that  question  specifically  in 
these  words,  "Would  that  be  the  president  of  the  Elgin  National 
Watch  Co.?"  and  he  said,  "Yes." 

Other  witnesses  testified  that  similar  representations 
were  made  to  them  and  that  they  purchased  goods  and 
signed  contracts  in  the  belief  that  they  were  dealing 
with  the  Elgin  National  Watch  Co.  In  this  way  an 
entirely  fictitious  credit  was  obtained  and  large  sales 
of  cheap  jewelry  were  made,  all  of  which  was  made  pos- 
sible by  the  unfair  use  of  the  name  "Elgin"  and  without 
which  the  sales  could  not  have  been  accomplished.  The 
court  found  that  the  defendants  had  not  gone  to  Elgin 

155 


RESTRAINING     UNFAIR     TRADE 

in  good  faith  and,  whatever  might  have  been  their  rights 
if  they  had  been  acting  fairly,  their  location  in  Elgin 
was  a  sham  for  the  purpose  of  taking  advantage  of 
the  reputation  of  the  Elgin  National  Watch  Co.,  and 
directed  an  injunction  against  the  use  of  the  word 
"Elgin"  in  so  far  as  the  jewelry  and  watch  trade  of 
the  defendants  was  concerned.  The  court,  in  the  course 
of  its  opinion,  stated: 

It  is  plain  from  complainant's  proofs  that  the  continued  use 
of  the  word  "Elgin"  by  the  defendants  as  used  by  them  is  liable 
to  and  will  confuse  buyers  quite  generally  and  lead  many  to  believe 
that  the  jewelry  sold  and  offered  by  defendants  is  that  of  com- 
plainant's manufacture,  and  that  defendants  are  using  this  word  as 
a  part  of  their  trade  name  to  palm  off  upon  the  public  their  own 
jewelry  as  the  product  and  manufacture  of  complainant,  and  that 
this  will  cease  only  when  such  use  of  said  word  ceases. 

These  cases  are  so  essentially  fact  cases  that  it  is 
difficult  to  make  general  statements  that  are  accurate. 
If  the  court  is  convinced  that  the  defendant  is  in  good 
faith  using  a  place  name  and  has  a  valid  reason  for  using 
it,  such  as  truthfully  to  indicate  where  he  is  doing  busi- 
ness, the  use  of  the  name  will  be  permitted  with  such 
distinctions  or  explanations  as  will  prevent  deception. 
If  on  the  other  hand  the  defendant  is  not  located  in 
the  town  whose  name  he  is  using  or  if  it  is  clear  that  his 
location  in  the  town  is  a  sham,  devised  for  the  purpose 
of  stealing  a  successful  competitor's  business,  the  courts 
do  not  shrink  from  imposing  drastic  restraint  even  to 
the  extent  of  total  prohibition  of  all  use  of  the  place 
name. 

In  one  English  case,  where  the  complainant  for  over 
a  century  had  conducted  a  brewery  in  a  town  called 
Stone  and  his  ales  had  acquired  a  reputation  all  over 
the  United  Kingdom  under  the  name  "Stone  Ales",  the 
defendant,  who  had  formerly  been  a  public  house  keeper, 
went  to  Stone,  started  a  brewery,  and  immediately  began 
the  sale  of  ale  under  the  designation  "Stone  Ales".  He 
gave  as  a  reason  for  going  to  Stone  the  excellent  quality 
of  the  water  and  its  adaptability  to  brewing.  One  of 
the  members  of  the  House  of  Lords,  where  the  case 

156 


DECEPTIVE     PLACE     NAMES 

was  ultimately  determined,  who  was  a  Scotchman,  in 
commenting  on  this  alleged  reason  for  going  to  Stone, 
observed : 

He  (the  defendant)  had  to  find  a  site  for  his  business.  Where 
was  he  to  go?  After  much  consideration,  influenced,  as  he  said, 
by  the  peculiar  virtue  of  the  water,  he  resolved  to  go  to  Stone. 
One  thing  leads  to  another.  Having  gone  to  Stone,  he  could  think 
of  no  better  name  for  his  brewery  than  Stone  Brewery.  He  could 
find  no  more  fitting  designation  for  his  ales  than  Stone  Ales. 
Then  came  these  proceedings.  It  is  not  the  first  time  in  these  cases 
that  water  has  got  an  honest  man  into  trouble  and  then  failed  him 
at  the  pinch. 

And  in  justifying  a  total  prohibition  of  the  use  of 
the  word  "Stone"  and  the  futility  of  attempted  distinc- 
tions, the  same  Judge  remarked: 

It  would  have  been  impossible  for  him  to  have  distinguished  his 
ales  from  those  of  the  plaintiff.  Any  attempt  to  distinguish  the 
two,  even  if  it  were  honestly  meant,  would  have  been  perfectly  idle. 
Thirsty  folks  want  beer,  not  explanations.  If  they  get  the  thing 
they  want  or  something  like  it  and  get  it  under  the  old  name,  the 
name  with  which  they  are  familiar,  they  are  likely  to  be  supremely 
indifferent  to  the  character  and  conduct  of  the  brewer  and  the 
equitable  rights  of  rival  traders. 


157 


CHAPTER  XVI 

DECEPTIVE  USE  OF  PERSONAL 
NAMES 


EVERY  man's  name  is  his  own.  He  has  a  right  to 
go  into  any  lawful  business  and  he  has  a  right 
to  use  his  own  name  in  connection  with  it.  These  rights, 
of  course,  the  law  must  recognize.  Hence  it  is  that 
personal  names  are  not  sanctioned  as  technical  trade- 
marks. A  technical  trade-mark  right  is  exclusive,  and 
to  give  to  one  man  who  may  bear  a  certain  name  the 
right  to  exclude  others,  who  may  also  bear  the  name, 
from  all  use  of  it  would  be  unconscionable.  But  all 
rights  are  coupled  with  corresponding  obligations  and 
whether  it  be  his  own  name  or  any  other  thing  that  he 
owns,  a  man  must  so  use  it  as  not  unnecessarily  to 
damage  his  neighbor. 

It  was  a  fashionable  method  of  unfair  trading  a 
dozen  years  ago  for  schemers  to  discover  unknown  per- 
sons bearing  names  made  valuable  by  others  or  for  such 
commercial  nonentities  to  discover  themselves  and  by 
starting  in  a  similar  business  to  attempt  to  profit  by 
the  patronymic  coincidence.  Few  products  known  and 
advertised  under  personal  names  have  been  free  of  this 
sort  of  piracy.  Rogers'  Silverware,  Pillsbury's  Flour, 
Stuart's  Dyspepsia  Tablets,  Bull's  Cough  Syrup, 
Baker's  Chocolate,  Gate's  Cigars,  Hall's  Safes,  Wil- 
liams' Soaps,  Royal  Baking  Powder,  Beecham's  Pills 
and  many  other  products  known  by  a  surname  have 
been  the  victims  of  this  variety  of  thievery. 

^/Vhere  the  parasite  does  not  bear  the  name,  but  has 

158 


DECEPTIVE     PERSONAL     NAMES 

deliberately  adopted  a  famous  name  to  do  business 
under,  no  difficulty  is  experienced  in  putting  a  stop  to 
his  depredations.  An  absolute  prohibition  from  all 
use  of  the  name  is  decreed.  In  deciding  a  case  where 
a  man  assumed  the  name  (Pinet)  of  a  well  known  Eng- 
lish boot  maker  for  trade  purposes,  the  matter  was 
thus  concisely  put  by  a  distinguished  English  judge: 

I  think  the  case  is  a  very  clear  one.  As  regards  this  man,  who 
began  life  as  an  Irish  solicitor  under  the  name  of  Dutch,  who  has 
since  changed  successively  to  the  trades  of  money  lender  and  manu- 
facturer of  boots  and  shoes  under  various  names,  who,  when  he 
wants  to  deal  in  money  in  Pall  Mall,  takes  the  name  of  Ransom, 
and  then  changes  subsequently  to  Gower,  then  again  to  Forbes 
Gower,  then  when  he  goes  into  boots  takes  the  name  of  Pinet  for 
reasons  which  everyone  knows,  I  think  he  is  utterly  wrong.  He 
has  been  guilty  from  first  to  last  of  a  commonplace  clumsy  fraud, 
and  I  think  I  should  be  wasting  public  time  if  I  were  to  give  any 
more  words  to  the  position  he  has  in  the  matter. 

It  ought  to  be  clear  to  everyone  with  a  conscience 
that  should  Smith  adopt  the  name  Pillsbury  and  go 
into  the  flour  business,  -  or  the  name  of  Baker  and  go 
to  making  chocolate,  he  has  but  one  purpose  and  that 
to  steal  the  successful  business  so  long  conducted  under 
this  name.  This  sort  of  thing  is  a  fraud  on  its  face 
and  the  use  of  the  name  ought  to  be  stopped  and  stopped 
completely,  and  the  sooner  the  better.  Of  course  Smith 
has  the  same  right  to  go  into  the  flour  or  chocolate 
business  as  anyone  else.  This  is  legitimate  enough.  The 
fraud  lies  in  the  name  adopted.  By  reason  of  the  long 
use  of  these  names  by  their  original  bearers,  a  new 
Pillsbury's  flour  or  a  new  Baker's  chocolate  must  result 
in  deceiving  the  public,  and  pirating  the  business  already 
established  under  the  old  name.  The  deceptive  effect 
would  be  the  same,  whether1  the  newcomer's  name  was 
Smith  and  he  assumed  the  name  Pillsbury  or  Baker,  or 
whether  having  the  name  Pillsbury  or  Baker  he  assumed 
the  flour  or  chocolate  business  to  use  it  in.  But  why,  it  is 
argued,  should  a  man  be  kept  out  of  the  flour  or  chocolate 
business  or  be  required  to  conduct  it  anonymously  because 
he  happens  to  bear  the  name  he  does  in  fact  bear.  This 

159 


RESTRAINING     UNFAIR     TRADE 

perhaps  is  no  place  to  air  individual  views.  I  am  unable 
personally  to  see  the  difference  between  changing  a 
name  to  fit  a  business  and  changing  a  business  to  fit 
a  name,  where  the  result  is  the  same  in  either  case; 
namely,  injury  to  a  cbmpetitor  and  deception  of  the 
public.  But  the  courts  do  make  a  distinction  and  hold 
that  it  is  fraudulent  for  a  man  to  adopt  a  famous 
name  to  do  business  under  and  stop  the  use  of  the  name 
entirely,  though  they  permit  a  man  having  a  famous 
name  to  adopt  a  business  and  use  the  name  in  connec- 
tion with  it,  often,  however,  restricting  the  use  of  the 
name  in  that  business  so  as  to  minimize  its  deceptive 
effect.  The  difficulty  of  an  equitable  adjustment  of 
rights  under  such  circumstances  is  enormous. 

AVOIDING  DECEPTION  IN  PERSONAL  NAMES 

1What  distinctions  will  be  sufficient  must,  of  course, 
idepend  upon  the  circumstances  in  each  particular  case. 
A  distinction  ample  in  one  trade  would  be  utterly  in- 
adequate in  another.  For  example,  a  man  named  Royal 
at  Louisville,  started  to  make  baking  powder  and  used 
his  name  upon  the  front  of  his  cans  in  large  letters. 
Of  course  this  induced  its  sale  as  Royal  Baking  Powder, 
and  was  a  manifest  fraud.  He  was  enjoined  because 
the  court  found  it  was  not  necessary  thus  prominently 
to  display  the  name.  It  was  recognized  that  he  had  a 
right  to  state  that  he  made  the  product,  but  was  re- 
quired by  the  court  to  place  his  name  upon  the  back 
of  the  cans.  A  bicycle  repairman  named  William  H. 
Rogers  of  Plainfield,  N.  J.,  decided  to  go  into  the  silver- 
ware business  and  used  the  name  Rogers  in  connection 
with  his  plated  ware.  He  was  permitted  to  do  so  only 
when  he  used  his  full  name,  "William  H.  Rogers"  or 
"W.  H.  Rogers"  and  in  addition  the  words  "Not  the 
original  Rogers"  or  "Not  connected  with  the  original 
Rogers"  all  in  type  of  the  same  or  greater  size  and 
clearness.  These  explanatory  statements  must  accom- 
pany the  use  of  the  name,  so  as,  to  quote  the  language 

160 


DECEPTIVE     PERSONAL     NAMES 

of  Mr.  Justice  Holmes  of  the  Supreme  Court,  "to  give 
the  antidote  with  the  bane". 

It  must  be  said  that  the  courts  ten  years  ago  were 
more  severe  in  their  restraint  of  the  deceptive  use  of 
personal  names  than  they  are  today.  In  the  case  in- 
volving Stuart's  Dyspepsia  Tablets,  decided  by  the  Cir- 
cuit Court  of  Appeals  in  Chicago  in  1899,  complainant 
was  the  producer  of  the  well  known  "Stuart's  Dyspepsia 
Tablets"  sold  in  packages  bearing  labels  shown  at  the 
bottom  of  page  171. 

The  defendant,  whose  name  was  Stewart,  put  out  a 
competing  article  in  a  package  shown  at  the  upper  left- 
hand  on  page  171. 

The  complainant's  package  was  a  light  blue,  the  de- 
fendant's an  ultramarine  blue.  There  was  little  physical 
resemblance  between  the  packages.  The  deception  lay 
in  the  use  of  the  name  "Stewart".  The  case  was  sum- 
marily disposed  of,  the  Court  concluding: 

The  case  is  too  plain  for  further  comment.  The  decree  will  be 
reversed  and  the  cause  remanded  to  the  court  below  with  directions 
to  enter  a  decree  in  favor  of  the  complainant  pursuant  to  the  prayer 
of  the  bill. 

Following  certain  decisions  of  the  Supreme  Court  of 
a  later  day,  the  lower  courts  have  recently  become,  it 
seems  to  me,  unduly  liberal  in  permitting  the  parasitical 
use  of  famous  surnames  and  under  the  present  state  of 
the  law  it  probably  must  be  accepted  that  a  man  has 
a  right  to  go  into  any  business  he  sees  fit  and  may  use 
his  own  name  in  it,  and  if  that  name  happens  to  have 
been  made  famous  by  a  predecessor  in  the  same  business 
it  is  the  parasite's  good  fortune  and  the  predecessor's 
misfortune.  That  any  confusion  due  solely  to  the  com- 
mon surname  must  be  put  up  with,  but  that  the  new 
comer  must  not  use  any  artifice  or  contrivance  to  in- 
crease the  confusion  which  may  be  caused  by  the  com- 
mon name,  and  that  where  the  name  has  been  so  long 
used  and  is  so  closely  associated  with  a  specific  product 
that  it  indicates  the  product  and  nothing  else,  the  de- 
fendant's use  of  the  name  must  be  directly  coupled  with 

161 


RESTRAINING     UNFAIR     TRADE 

distinctions  by  positive  statements  or  otherwise  so  that 
it  will  be  made  clear  that  he  is  a  new  comer  and  is  not 
the  old  establishment. 

The  development  of  the  Baker  cases  illustrates  this 
condition.  Walter  Baker  &  Company  has  been  in  busi- 
ness for  over  a  century,  so  that  Baker's  Cocoa  and 
Baker's  Chocolate  were  the  names  by  which  its  products 
were  known,  that  is  to  say,  Baker's  Chocolate  did  not 
mean  a  product  made  by  a  man  named  "Baker"  as  dis- 
tinguished from  a  product  made  by  a  man  named  Rob- 
inson, but  indicated  a  certain  specific  article  of  ap- 
proved excellence.  William  Henry  Baker,  who  was  a 
grocer  in  Winchester,  Virginia,  in  the  months  of  May 
and  June  of  1894  had  several  conferences  with  J.  El- 
wood  Sanders,  then  in  the  employ  of  Rockwood  &  Com- 
pany, manufacturers  of  chocolate.  Baker  engaged  the 
services  of  Sanders,  and  commenced  the  sale  of  choco- 
late which  he  had  made  for  him.  A  partnership  was 
at  that  time  contemplated  between  himself  and  Sanders 
and  the  firm  name  of  W.  H.  Baker  &  CQ.  adopted.  That 
partnership  was  not  formed.  Walter  Baker  &  Co.  had 
a  brand  called  "German  Sweet  Chocolate".  William 
Henry  Baker  immediately  started  with  a  "Germania 
Sweet  Chocolate". 

Walter  Baker  &  Co.'s  cooking  chocolate  label  was 
as  shown  at  the  top  of  page  163. 

William  Henry  Baker's  original  label  for  bitter  choco- 
late was  a  lemon  yellow  on  a  blue  wrapper  in  the  form 
shown  in  the  next  figure  on  the  same  page. 

A  suit  was  started  by  Walter  Baker  &  Co.  and  an 
injunction  obtained  against  these  obviously  fraudulent 
practices  and  against  the  use  of  the  name  "Baker's" 
aloHo,  and  William  Henry  Baker  was  required  to  use 
the  full  name  "W.  H.  Baker"  or  "W.  H.  Baker's"  and 
was  restrained  from  using  any  yellow  label.  He  there- 
upon changed  his  label  and  substituted  for  the  yellow 
label  one  light  blue  in  color  with  the  ingenious  state- 
ment "Best  quality  now  with  blue  label"  in  the  form 
shown  following  the  previous  one. 

162 


Jomarily  used  by  Bakers  for  all  Baking  purposes 

'fyrtiunt  rftttt  ht-jliest grades  ofKacr,a  *nd  puaranttrd 
•••„.•>  ',-•>>,  '''fr  CAat*  inte  moat  in  tJtt  wona. 


W.H.BAKER  &  Co.  Winchester,  Va 

f  ftem.um  Chocol«e.Bre»W»s» 
PHILAOCLPHIA.™. 

<?-:«-*1 


Each  of  the  three  lower  labels  infringed  on  the  Walter  Baker  &  Company's  label 

at  the  top,  which  was  yellow.     W.  H.  Baker's  first  label  was  also  yellow,  but  the 

two  succeeding  ones  were  light  blue.     All  the  wrappers  were  deep  blue.     The  last 

label  was  the  one  finally  adopted  and  was  sanctioned  by  the  court 


DECEPTIVE     PERSONAL     NAMES 

Of  course  this  second  label  was  not  less  fraudulent 
than  the  first,  though  considerably  more  ingenious,  and 
it  was  evident  that  a  further  restraint  was  necessary. 
The  Court  of  Appeals  held  that  William  Henry  Baker 
"should  not  be  allowed  to  use  his  surname  Baker 
whether  his  given  name  or  its  initials  are  prefixed,  or  not, 
so  as  to  announce  upon  label  or  advertisement  that  the 
goods  he  sells  are  Baker's  Chocolate".  An  alternative 
form  of  injunction  was  suggested,  allowing  the  defend- 
ant to  continue  the  label  as  above  shown  upon  condi- 
tion that  there  be  affixed  to  every  package  sold,  in  type 
as  prominent  as  the  title,  the  statement  "W.  H.  Baker 
is  distinct  from  and  has  no  connection  with  the  old 
chocolate  manufacturer,  Walter  Baker  &  Co.".  This 
alternative  was  adopted  and  the  label  shown  in  the 
fourth  figure  on  page  163  was  continued. 

The  result  of  this  litigation  is  instructive  in  showing 
how  deception  persists  even  when  hedged  around  with 
what  seem  a  priori  the  most  ample  safeguards,  because 
William  Henry  Baker's  product  in  the  above  dress, 
which  was  judicially  approved,  and  was  doubtless 
thought  to  be  sufficiently  distinguished  to  prevent  de- 
ception and  mistake,  was  systematically  advertised  and 
sold  by  Charles  H.  Slack,  a  Chicago  grocer,  as  "Baker's 
Chocolate"  and  passed  out  to  people  who  asked  for 
"Baker's  Chocolate",  and  it  was  not  until  the  Circuit 
Court  of  Appeals  had  passed  upon  it  that  adequate  re- 
lief was  obtained  and  the  public  protected  from  imposi- 
tion. That  Court  held  that  Baker's  Chocolate  meant 
Walter  Baker's;  that  the  William  Henry  Baker  prod- 
uct, even  under  the  label  bearing  the  announcement  of 
distinction,  could  not  lawfully  be  sold  as  Baker's  Choco- 
late, and  that  the  announcement  was  not  sufficient  to 
protect  the  purchaser  from  imposition  when  the  article 
was  passed  out  at  a  retail  store  in  response  to  requests 
for  Baker's  Chocolate. 

However  sedulously  the  courts  at  the  present  time 
attempt  to  permit  a  new  trader  to  use  his  name  where 
that  name  is  a  famous  one  in  the  line  of  business 

165 


RESTRAINING     UNFAIR     TRADE 

adopted,  they  do  not  shrink  from  restricting  that  use 
where  the  only  result  of  permitting  it  would  be  to  de- 
ceive the  public  and  purloin  an  established  trade.  It 
is  always  argued  by  defendants  in  opposition  to  at- 
tempts to  limit  or  restrict  the  use  of  personal  names, 
that  the  name  is  the  defendant's  own  and  from  this 
premise  it  is  sought  to  draw  the  conclusion  that  every 
consequence  arising  from  the  use  of  the  name  is  lawful. 
The  fallacy  involved  in  this  conclusion  has  been  exposed 
in  these  cases  time  and  time  again.  Of  course,  the 
defendant's  name  is  his  own.  This  ought  not  to  give 
him  any  more  right  to  perpetrate  a  fraud  by  means 
of  it  than  to  perpetrate  a  fraud  in  any  other  way.  The 
fact  that  it  is  his  own  name  makes  no  difference;  owner- 
ship is  not  a  license  unnecessarily  to  injure  another. 
Blackbeard  was  none  the  less  a  pirate  because  he  owned 
the  ship  in  which  he  made  his  cruises  along  the  Spanish 
main. 

A  distinguished  Federal  -judge,  who  had  much  ex- 
perience in  these  cases,  once  took  occasion  to  comment 
upon  the  arguments  so  often  advanced  on  behalf  of 
piratical  users  of  their  own  names  by  saying: 

It  was  contended  for  the  defendant,  upon  the  hearing,  that  every 
man  has  a  right  to  the  use  of  his  own  name  in  business,  and,  as  to 
the  order  of  injunction  below  restraining  defendant  from  using 
white  paper  for  its  labels,  that  every  person  has  a  constitutional 
right  to  use  white  paper.  These  propositions,  in  the  abstract,  are 
undeniably  true,  but  counsel  for  the  time  overlooked  the  fact  that, 
wherever  there  is  an  organic  law,  wherever  a  constitution  is  to  be 
found  as  the  basis  of  the  rights  of  the  people,  and  as  the  foundation 
and  limit  of  the  legislation  and  jurisprudence  of  a  government,  there 
the  mutual  rights  of  individuals  are  held  in  highest  regard  and 
are  most  zealously  protected.  Always,  in  law,  a  greater  right  is 
closely  related  to  a  greater  obligation.  While  it  is  true  that  every 
man  has  a  right  to  use  his  own  name  in  his  own  business,  it  is  also 
true  that  he  has  no  right  to  use  it  for  the  purpose  of  stealing  the 
good  will  of  his  neighbor's  business,  nor  to  commit  a  fraud  upon  his 
neighbor,  nor  a  trespass  upon  his  neighbor's  rights  or  property;  and, 
while  it  is  true  that  every  man  has  a  right  to  use  white  paper,  it 
is  also  true  that  he  has  no  right  to  use  it  for  making  counterfeit 
money,  nor  to  commit  a  forgery.  It  might  as  well  be  set  up,  in 
defense  of  a  highwayman,  that,  because  the  constitution  secures  to 

166 


DECEPTIVE     PERSONAL     NAMES 

every  man  the  right  to  bear  arms,  he  had  a  constitutional  right  to 
rob  his  victim  at  the  muzzle  of  a  rifle  or  revolver.  It  has  been 
held,  with  reference  to  trade-marks,  that  a  man  has  not  the  right 
to  use  even  his  own  name  so  as  to  deceive  the  public,  and  make 
them  believe  that  he  is  selling  the  goods  of  another  of  the  same  name. 

It  should  never  be  forgotten,  however,  that  these  cases 
are  cases  of  fact.  The  contention  always  is,  on  the 
part  of  the  complainant,  that  the  defendant,  by  the 
use  of  his  personal  name,  is  making  the  false  representa- 
tions to  the  public  that  his  goods  are  the  complainant's. 
It  should  be  made  perfectly  clear  by  the  evidence  that 
this  false  representation  is  in  fact  being  made,  and  since 
the  courts  invariably  enjoin  or  restrict  the  efficient 
means  of  making  this  representation,  when  it  is  clearly 
shown  that  it  is  being  made,  they  usually  find  a  way 
to  stop  it  even  when  a  man  is  making  it  by  the  use 
of  his  own  name.  They  recognize  that  fraud  is  fraud 
and  it  is  the  fraud  and  not  the  manner  of  it  which  calls 
for  the  interposition  of  the  court. 


167 


CHAPTER  XVII 

DECEPTIVE  USE  OF 
DESCRIPTIONS 


EVERYONE,  it  must  be  conceded,  has  the  right  to 
describe  the  goods  he  sells.  A  man  who  sells  leather 
boots  ought  not  to  be  prevented  from  stating  that  fact. 
A  gold  watch  or  a  diamond  ring  is  a  gold  watch  or  a 
diamond  ring,  and  must  be  so  described  if  described  at 
all.  To  permit  one  dealer  in  watches  to  monopolize  the 
word  "gold"  and  prevent  others  from  using  that  word 
to  describe  their  gold  watches  would  be  unconscionable 
indeed.  While  it  was  seen  many  years  ago  that  place 
and  personal  names  might  acquire  a  secondary  mean- 
ing and  so  by  constant  association  with  a  certain  prod- 
uct come  to  designate  it  and  be  its  trade  identifying 
nickname,  so  as  to  make  untruthful  or  undistinguished 
use  by  another  unfair  and  deceptive,  it  was  not  thought 
possible  for  a  description  to  lose  its  primary  meaning 
and  acquire  any  such  artificial  significance.  That  com- 
mercial fraud  and  the  false  representation  that  one 
trader's  goods  are  another's  could  be  made  by  the  use  of 
words  or  expressions  accurately  descriptive  of  both 
articles  was  not  fully  recognized  judicially  until  1896, 
and  might  not  have  then  but  for  a  curious  combination 
of  circumstances. 

Frank  Reddaway  was  a  manufacturer  of  belting, 
made  out  of  hair,  at  Pendleton  in  Lancashire.  There 
were  a  number  of  makers  of  this  product,  which  had 
a  large  sale  and,  in  countries  where  heat  is  great  and 
the  air  very  dry,  is  preferable  to  leather.  All  hair  belt- 

168 


DECEPTIVE     DESCRIPTIONS 

ing,  of  whatever  make,  was  generally  composed  more  or 
less  of  stuff  imported  into  England  from  Asia  and  sold 
in  the  English  market  as  camel  hair.  Nobody  imagined 
that  the  camel  hair  of  commerce  was  true  to  name.  It 
was  believed  to  be  a  mixture  of  the  hair  of  goats  and 
of  various  other  animals  and  the  wool  of  sheep  with 
which  the  hair  of  the  camel  might  be  found,  but  which 
was  not  even  pretended  to  be  wholly  or  even  largely 
composed  of  camel  hair.  Indeed  so  little  importance 
was  attached  to  its  nominal  connection  with  the  camel, 
that  the  yarn  made  from  this  product  was  sold  gen- 
erally in  England  under  the  name  "brown  worsted".  It 
was  the  custom  in  the  industry  to  name  belting  made 
from  this  mixture,  and  which  was  generally  sold  to 
native  mill  owners  in  British  tropical  dependencies,  with 
the  name  of  animals.  For  example,  there  was  a  "Yak" 
belting  on  the  market  and  also  "Llama",  "Buffalo"  and 
"Crocodile"  brands.  Reddaway,  unfortunately  for  him 
as  it  turned  out,  selected  the  camel  as  his  emblem.  His 
belting  was  advertised  under  the  name  "Camel",  "Camel 
Brand"  and  "Camel  Hair"  and  usually  in  connection 
with  the  picture  of  a  camel.  The  name  was  supposed 
to  be  a  fancy  and  non-descriptive  term.  In  fact  Redda- 
way in  1892  brought  a  lawsuit  on  that  theory  against 
the  Bentham  Hemp  Spinning  Co.  to  restrain  them  from 
all  use  of  the  word  "Camel  Hair".  In  the  report  of  the 
case  it  appears  that  the  complainant's  counsel  argued 
"That  the  expression  'Camel  Hair'  is  really  a  fancy 
name,  that  it  is  a  fancy  name  that  does  not  describe 
and  is  not  meant  to  describe  the  material  of  which  the 
belting  is  made".  It  was  held  by  the  court  that  the 
name  being  non-descriptive  and  fancy,  its  use  by  de- 
fendants was  presumptively  fraudulent.  One  of  the 
judges,  in  commenting  on  the  defendant's  conduct,  made 
this  observation : 

"The  defendants  might  have  called  their  belting  'Goat  Hair  Belting', 
'Sheep  Hair  Belting,'  'Buffalo  Hair  Belting'  or  many  other  names  that 
could  be  easily  suggested.  They  called  their  belting,  however, 'Camel  Hair 
Belting'.  Surely  the  assumption  of  this  description  calls  for  explana- 

169 


RESTRAINING     UNFAIR     TRADE 

lion  and  is  evidence  of  fraudulent  intent,  about  which  the  opinion  of  the 
jury  ought  to  have  been  taken." 

It  will  thus  be  seen  that  everybody,  including  Redda- 
way  himself,  assumed  that  the  use  of  the  words  "Camel" 
and  "Camel  Hair"  on  his  belting  was  a  purely  arbitrary 
thing  and  it  was  no  more  descriptive  than  "Moon 
Brand"  or  "Sun  Brand"  would  have  been.  After  dis- 
posing of  the  suit  he  had  against  Bentham  Hemp  Spin- 
ning Co.,  Reddaway  discovered  that  an  ex-employee  of 
his,  named  Banham,  had  gone  into  the  belting  business. 
At  the  outset  Banham  called  his  belting  "Arabian"  and 
coupled  the  name  with  a  statement  "Guaranteed  to  be 
better  than  the  belting  commonly  called  'Camel  Hair 
Belting' ".  It  developed  that  Banham  had  some  cor- 
respondence with  an  agent  in  which,  among  other  things, 
he  wrote,  "Tell  them  we  will  stamp  'Camel  Hair  Belt- 
ing' *  *  *  if  they  choose  without  the  maker's  name". 
Another  agent  wrote  to  Banham,  saying:  "If  I  have 
here  by  Monday  an  exact  duplicate  sample  to  enclosed 
in  appearance  and  quality  stamped  'Camel  Hair  Belt- 
ing' and  nothing  more,  I  think  I  can  take  this  order 
from  Reddaway's."  The  sample  enclosed  was  a  sample 
of  Reddaway's  belting.  Thereupon  Banham  rechristened 
his  "Arabian  Belting"  "Camel  Hair  Belting".  It  is 
very  evident  from  this  and  from  other  circumstances 
that  Banham  purposed  to  get  Reddaway's  trade  away 
from  him,  and  that  he  chose  the  designation  "Camel 
Hair  Belting"  as  a  means  of  accomplishing  it.  Redda- 
way thereupon  sued  and  asked  for  an  injunction  re- 
straining Banham  from  the  use  of  the  name  "Camel 
Hair  Belting".  Defendant  answered  by  a  counter-blast, 
contending  that  Reddaway  did  not  come  into  court  with 
clean  hands  because  he  contended  Reddaway  "had  de- 
scribed his  belting  as  'Camel  Hair  Belting'  in  adver- 
tisements, circulars  and  pamphlets,  and  stated  that  his 
belting  was  made  of  the  hair  of  the  camel,  whereas  in 
fact  it  is  not  made  of  the  hair  of  the  camel".  Attention 
was  called  to  certain  of  Reddaway's  pamphlets  wherein 
he  described  his  wanderings  in  Asia  with  detailed  state- 

170 


^TUARJ'5 

jspepsia  f  ablets. 

IM 


Prke,  $1.00. 


^ 


Stuart 'j  Dyspepsia  Tablets. 

cur.  »:i  for«>  -,t  !>y..ix-f,fln, 
I,,   II,  ;..   .      ':.   .    .    -\.    :    I    1  vr'ni,  /.  tiJ- 


R>. 


»f'.fti     .     .  ALSOt»t»on«  vf 
tfur  e»ch  n.i  »].  or  on™  »i  !;,    • 

Bpl«*MU.t  !«  fc 


6  Boxes  for  *5.00. 


STUART'S  DYSPEPSIA  TABLETS 


Unfair  trading  by  the  use  of  a  deceptive  personal  name,   is  illustrated  by  the 
"Stewart"  package.  Aside  from  the  name  both  packages  were  readily  distinguish- 
able.   The  proprietor  of  "M  &  M"  extract  was  prevented  from  using  the  picture  of 
a  celery  head  and  the  words,  "Celery  Compound" 


DECEPTIVE     DESCRIPTIONS 

ments  calculated  to  lead  the  public  to  believe  that  large 
quantities  of  camel  hair  were  imported  by  him  and  made 
into  his  belting.  These  statements,  the  defendant  con- 
tended, were  false.  Reddaway's  statement  in  the  case 
against  Bentham,  that  the  bulk  of  the  material  sold 
by  him  was  composed  of  wool  of  the  sheep  and  hair  of 
the  wild  goat,  was  referred  to  as  a  demonstration  of 
the  falsity  of  the  designation  "Camel  Hair". 

Reddaway  therefore  found  himself  facing  alternatives 
equally  unpleasant.  If  he  contended,  as  he  had  in  his 
case  against  the  Bentham  Company,  that  the  name 
"Camel  Hair  Belting"  was  a  fancy  name  he  might  be 
barred  from  relief  on  the  ground  of  his  own  misrepre- 
sentations. If  he  contended  the  name  to  be  an  accurate 
description  of  his  belting,  he  admitted  himself  out  of 
court  because,  up  to  that  time  at  least,  no  court  had 
gone  so  far  as  to  hold  that  any  right  could  be  claimed  in 
a  descriptive  name.  During  the  course  of  the  trial  at 
the  Assizes  at  Manchester  it  was  proved  partly  by  the 
evidence  of  experts  and  partly  by  an  exhibit  collected 
from  a  living  animal  at  the  Manchester  Zoological 
Gardens  that  the  camel  hair  of  commerce,  of  which 
many  bundles  were  produced,  and  of  which  Reddaway's 
"Camel  Hair  Belting"  was  admittedly  made,  was  really 
and  truly  for  the  most  part  composed  of  genuine  camel 
hair.  Hence  the  name  "Camel  Hair"  as  used  by  Redda- 
way was  merely  a  description  of  his  goods.  This  evi- 
dence seems  to  have  come  as  a  revelation  to  Reddaway 
and  his  advisers.  It  established  that  Reddaway's  trade 
designation,  instead  of  being  as  theretofore  supposed 
a  fancy  name,  was  nothing  more  or  less  than  a  sub- 
stantially accurate  description  of  the  material  of  which 
his  belting  was  composed. 

The  court  before  whom  the  case  was  tried  at  first 
instance  put  certain  questions  to  the  jury.  (1)  Does 
"Camel  Hair  Belting"  mean  belting  made  by  the  plain- 
tiffs as  distinct  from  belting  made  by  other  manufac- 
turers? or  (2)  does  it  mean  belting  of  a  particular  kind, 
without  reference  to  any  particular  maker?  (3)  Do 

173 


RESTRAINING     UNFAIR     TRADE 

the  defendants  so  describe  their  belting  as  to  be  likely 
to  mislead  purchasers,  and  to  lead  them  to  buy  the 
defendant's  belting  as  and  for  the  plaintiff's  belting? 
(4)  Did  the  defendants  endeavor  to  pass  off  their  goods 
as  and  for  the  plaintiff's  goods,  so  as  to  be  likelv  to 
deceive  purchasers?  The  Jury  answered  "Yes"  to  ques- 
tions one,  three  and  four,  and  "No"  to  the  second  ques- 
tion. 

The  court  below  gave  a  judgment  for  Reddaway  on 
the  verdict  of  the  jury.  The  case  then  went  to  the 
Court  of  Appeals,  where  the  judges  could  not  get  them- 
selves into  a  state  of  mind  which  would  permit  a  man 
to  acquire  any  right  in  a  descriptive  term  and  reversed 
the  judgment,  one  of  the  judges  thus  expressing  his  views : 

I  think  that  one  may  lay  down  this  rule;  a  man  may  call  the 
goods  he  is  selling  by  the  name  by  which  any  one  wanting  the 
goods  would,  in  the  ordinary  course,  call  them  in  any  market  in 
which  he  wanted  to  buy  them  or  sell  them,  although,  in  so  doing,  he 
calls  them  by  the  name  by  which  the  person  who  complains  has 
called  his  goods  in  the  market,  until  in  that  market  the  name  alone 
is  taken  to  mean  his  goods  alone.  For  instance,  a  man  invents 
shovels  made  wholly  of  iron.  He  takes  no  patent,  and  he  has  no 
trade-mark.  He  sells  them  as  "iron  shovels"  until  he  gets  the 
name.  His  iron  shovels  are  such  a  good  article  in  the  market,  that 
anybody  who  asked  for  iron  shovels,  or  who  ordered  iron  shovels, 
would  be  taken  to  either  ask  for  or  to  order  his  iron  shovels.  Then 
another  man  comes  into  the  market  and  makes  iron  shovels,  and 
offers  them  for  sale  as  "iron  shovels".  If  anybody  wanted  to  buy 
iron  shovels,  that  is,  shovels  made  only  of  iron,  in  any  market, 
what  could  he  ask  for?  He  could  not  ask  for  tin  shovels,  he  could  not 
ask  for  wooden  shovels,  or  shovels,  or  shovels  with  wooden  handles. 
The  only  thing  he  could  ask  for  would  be  iron  shovels,  and  he 
would  ask  for  them  in  any  market  where  he  was.  Well,  then,  the 
man  who  comes  into  the  market  and  makes  iron  shovels  has  a  right 
to  sell  iron  shovels  by  the  name  by  which  anybody  dealing  with  them 
in  the  market  would  have  to  call  them,  and  therefore  it  is  a  true 
description  of  them.  I  can  give  other  instances.  Suppose  a  man 
makes  soda  lozenges  or  liquorice  lozenges,  lozenges  made  of  soda, 
or  made  of  liquorice  only.  He  gets  a  name  for  his  "Soda  Lozenges" 
or  "Liquorice  Lozenges";  but  if  anybody  wants  to  buy  soda  lozenges 
in  any  market  what  can  he  ask  for?  He  cannot  ask  for  anything 
else.  Therefore,  if  a  man  comes  into  the  same  market,  and  asks 
for  soda  lozenges,  or  if  a  man  says  "I  sell  soda  lozenges",  he  is 
within  the  definition  which  I  first  gave  of  using  the  correct  name  for 

174 


DECEPTIVE     DESCRIPTIONS 

the  goods.  In  such  cases  the  man  who  sells  soda  lozenges,  or  iron 
shovels,  cannot  be  enjoined  against  saying,  "I  sell,  or  I  offer  to  sell, 
iron  shovels  or  soda  lozenges".  He  cannot  offer  anything  else. 
Therefore  it  is  within  the  exception  to  the  rule;  and  if  his  name  be 
the  same  name  as  the  plaintiff's,  why  then  he  says,  "I,  Reddaway, 
offer  to  sell  iron  shovels".  It  is  true  that  by  his  so  doing,  the 
people  in  the  market  may  deceive  themselves,  and  think  that  they 
are  buying  the  other  Reddaway's  iron  shovels.  They  must  put  up 
with  that  misfortune,  because  they  cannot  get  an  injunction  against 
a  man  to  say,  "You  are  not  to  call  them  iron  shovels,  so  that  if 
you  sell  iron  shovels  you  are  to  call  them  something  else,"  or,  as  was 
contended  in  the  case  of  Turton  v.  Turton,  "you  are  not  to  say  that 
your  name  is  Reddaway;  you  are  to  say  that  it  is  something  else". 
The  law  does  not  undertake  to  prevent  anybody  in  England  from 
taking  either  of  these  courses.  But  if  you  use  a  fancy  name  for 
the  goods,  then  you  are  not  giving  a  description  of  the  goods.  You 
are  giving  a  name  only,  and  not  a  description.  And  in  a  case 
which  I  believe  has  been  actually  before  the  court,  if  a  man  whose 
name  is  not  Reddaway — a  second  man — comes  into  the  market 
and  calls  himself  Reddaway,  he  is  not  telling  the  truth;  he  is  telling  a 
falsehood,  and  then  the  exception  does  not  apply. 

The  House  of  Lords,  however,  approached  the  ques- 
tion from  the  other  side,  not  from  the  standpoint  of 
the  defendant's  abstract  right  to  describe  his  goods, 
but  from  the  point  of  view  of  Reddaway's  rights  in  the 
business  he  had  built  up  under  the  name  "Camel  Hair 
Belting"  and  the  public's  right  to  buy  the  article  they 
thought  they  were  getting  by  the  name  by  which  it  had 
always  been  known,  and  totally  declined  to  accept  the 
views  of  the  Court  of  Appeals.  One  of  the  Law  Lords 
observed : 

I  cannot  help  saying  that  if  the  defendants  are  entitled  to  lead 
purchasers  to  believe  that  they  are  getting  the  plaintiffs'  manufac- 
ture when  they  are  not,  and  thus  to  cheat  the  plaintiffs  of  some 
of  their  legitimate  trade,  I  should  regret  to  find  that  the  law  was 
powerless  to  enforce  the  most  elementary  principles  of  commercial 
morality.  I  do  not  think  your  lordships  are  driven  to  any  such 
conclusion. 

In  my  opinion,  the  doctrine  on  which  the  judgment  of  the  Court 
of  Appeals  was  based,  that  where  a  manufacturer  has  used  as  his 
trade-mark  a  descriptive  word,  he  is  never  entitled  to  relief  against 
a  person  who  so  uses  it  as  to  induce  in  purchasers  the  belief  that 
they  are  getting  the  goods  of  the  manufacturer  who  has  theretofore 
employed  it  as  his  trade-mark,  is  not  supported  by  authority  and 
cannot  be  defended  on  principle.  I  am  unable  to  see  why  a  man 

175 


RESTRAINING     UNFAIR     TRADE 

should  be  allowed  in  this  way  more  than  in  any  other  to  deceive 
purchasers  into  the  belief  that  they  are  getting  what  they  are  not, 
and  thus  to  filch  the  business  of  a  rival. 

Another  judge  thus  expressed  his  views: 

The  learned  counsel  for  the  respondents  maintained  that  the  ex- 
pression "camel  hair  belting"  used  by  Banharn  was  "the  simple 
truth".  Their  proposition  was  that  "where  a  man  is  simply  telling 
the  truth  as  to  the  way  in  which  his  goods  are  made,  or  as  to  the 
materials  of  which  they  are  composed,  he  cannot  be  held  liable 
for  mistakes  which  the  public  may  make".  That  seems  to  me  to  be 
rather  begging  the  question.  Can  it  be  said  that  the  description 
"camel  hair  belting"  as  used  by  Banham,  is  the  simple  truth?  I 
will  not  call  it  an  abuse  of  language  to  say  so,  but  certainly  it  is 
not  altogether  a  happy  expression.  The  whole  merit  of  that  de- 
scription, its  one  virtue  for  Banham's  purposes,  lies  in  its  duplicity. 
It  means  two  things.  At  Banham's  works,  where  it  cannot  mean 
Reddaway's  belting,  it  may  be  construed  to  mean  belting  made  of 
camel  hair;  abroad,  to  the  German  manufacturer,  to  the  Bombay  mill 
owner,  to  the  up-country  native,  it  must  mean  Reddaway's  belt- 
ing; it  can  mean  nothing  else.  I  venture  to  think  that  a  state- 
ment which  is  literally  true,  but  which  is  intended  to  convey  a 
false  impression,  has  something  of  a  faulty  ring  about  it;  it  is  not 
sterling  coin;  it  has  no  right  to  the  genuine  stamp  and  impress  of 
truth. 

He  then  concluded  in  this  eloquent  language: 

But  fraud  is  infinite  in  variety;  sometimes  it  is  audacious  and  un- 
blushing; sometimes  it  pays  a  sort  of  homage  to  virtue,  and  then 
it  is  modest  and  retiring;  it  would  be  honesty  itself  if  it  could  only 
afford  it.  But  fraud  is  fraud  all  the  same;  and  it  is  the  fraud, 
not  the  manner  of  it,  which  calls  for  the  interpretation  of  the  court. 

My  excuse  for  thus  quoting  and  analyzing  this  par- 
ticular case  is  because  it  first  announced  in  unmistakable 
terms  that  the  accepted  principle,  that  no  one  has  a 
right  to  represent  his  goods  as  the  goods  of  another, 
is  perfectly  general  in  its  application;  that  it  makes 
no  difference  how  the  false  representation  is  being  made 
or  what  is  the  efficient  means  of  the  deception ;  that  it  may 
be  made  by  the  unfair  use  of  a  descriptive  term  and  if  it 
is  in  fact  so  being  made,  it  is  no  more  to  be  regarded 
as  legitimate  than  if  made  in  any  other  way.  When 
the  fact  is  proved  that  one  man's  goods  are  distinguished 
from  others  by  a  descriptive  term,  and  that  descriptive 

176 


DECEPTIVE     DESCRIPTIONS 

term  is  being  used  by  another  so  as  to  represent  that 
his  goods  are  those  to  which  the  descriptive  terra  had 
previously  been  applied,  in  short,  where  a  descriptive 
term  is  used  to  deceive  the  public  and  defraud  a  previous 
user  of  that  term,  the  courts  will  interfere  to  prevent 
the  accomplishment  of  the  fraud  by  enjoining  the  use 
of  its  efficient  instrument.  In  this  respect  the  case  of 
Reddaway  v.  Banham  marks  an  epoch  in  the  develop- 
ment of  the  law.  No  new  principle  was  laid  down  in 
this  case,  but  an  old  principle  was  applied  to  a  situation 
to  which  it  never  before  had  been.  The  decision  created 
no  end  of  discussion  in  England  and  in  the  United 
States,  but  it  now  embodies  the  accepted  doctrine  in 
both  countries.  To  show  the  manner  of  its  application 
concretely  one  or  two  illustrations  may  perhaps  be 
profitable. 

ENJOINING  THE  USE  OF  AN  ACCURATE  DESCRIPTION 
TO  PREVENT  FRAUD 

Wells  &  Richardson  Co.  for  many  years  have  pro- 
duced a  medicine  widely  known  arid  advertised  as 
"Paine's  Celery  Compound",.  The  article  was  made  of 
various  ingredients,  among  them  extract  of  celery  seed. 
The  package  contained  the  name  "Paine's  Celery  Com- 
pound" printed  in  conspicuous  fashion  and  the  picture 
of  a  head  of  celery.  The  article  was  known  in  the  trade 
and  among  purchasers  as  "Celery  Compound"  simply. 
People  asking  at  retail  stores  for  "Celery  Compound" 
expected  to  get  "Paine's  Celery  Compound"  and  this 
was  understood  to  be  quite  as  definite  a  request  for  this 
particular  product  as  if  the  whole  name  had  been  used. 
Siegel,  Cooper  &  Co.  placed  on  sale  at  their  Chicago 
store  a  product  called  "M.  &  M.  Compound  Extract 
Celery"  with  a  picture  of  a  celery  head  upon  the  pack- 
age and  advertised  "Celery  Compound".  Placards  were 
put  in  the  aisles  of  the  store,  reading  "Celery  Com- 
pound 85c.".  People  going  to  the  counter  and  asking 
for  "Celery  Compound"  were  given,  not  "Paine's  Celery 

177 


RESTRAINING     UNFAIR     TRADE 

Compound"  but  "M.  &  M.  Compound  Extract  Celery". 
The  packages  are  shown  in  the  illustrations  on  page  171. 
It  is  true  of  course  that  there  was  an  obvious  attempt 
to  imitate  the  appearance  of  the  "Paine's  Celery  Com- 
pound" package,  but  one  of  the  important  elements  in 
the  accomplishment  of  the  unfair  trading  was  the  de- 
ceptive use  of  the  descriptive  term  "Celery  Compound" 
and  it  was  contended  by  the  defendant  that  this  phrase 
was  a  mere  description  and  that  the  picture  of  a  celery 
head  as  used  by  the  complainant  was  nothing  but  pic- 
torial description.  An  injunction,  however,  was  directed 
against  the  imitation  of  the  package,  the  use  by  the 
defendant  of  the  words  "Celery  Compound"  and  ,the 
picture  of  the  celery  head. 

WHEN  DESCRIPTIONS  ACQUIRE  AN  ARTIFICIAL  SIGNIFICANCE 

The  Sterling  Remedy  Co.  for  many  years  has  put 
upon  the  market  a  remedy  well  known  as  "Cascarets" 
with  a  sub-title  or  catch  phrase  "Candy  Cathartic", 
which  was  very  generally  used  both  upon  the  packages 
and  in  advertisements.  The  top  of  the  "Cascarets" 
box  was  in  the  form  shown  at  the  left  on  page  179. 

A  Cleveland  man  put  upon  the  market  a  product  in 
boxes  like  the  following  figure  on  the  same  page.  In 
addition  to  the  manifest  imitation  by  the  defendant  of  the 
appearance  of  the  box,  the  most  deceptive  thing  about 
it  was  the  conspicuous  use  of  the  words  "Candy  Cathar- 
tics" and  it  was  sought  to  enjoin  the  use  of  this  term 
as  well  as  the  other  imitated  features.  Many  druggists 
were  called  as  witnesses  who  testified  that  consumers 
were  in  the  habit  of  coming  to  their  stores  and  asking 
for  "Candy  Cathartics"  and  that  in  response  to  such 
requests  "Cascarets"  were  always  furnished;  that  no 
customer  had  ever  refused  to  take  it  on  the  ground 
that  it  was  not  what  they  wanted. 

To  quote  a  line  or  two  from  the  testimony.  Richard 
P.  Williams,  a  Detroit  druggist,  testified  that  "Candy 
Cathartic"  meant  Cascarets".  He  was  being  cross- 

178 


All  of  the  labels  shown  at  the  left  were  declared  infringed  by  those  at  the  right, 
and  the  defendants  enjoined.    A  baker  of  an  oval  loaf  of  bread  succeeded  in  pre- 
venting another  baker  from  selling  a  loaf  of  the  same  appearance 


DECEPTIVE     DESCRIPTIONS 

examined  on  this  phase  of  the  case  by  opposing  counsel 
and  being  somewhat  badgered. 

Q.  You  don't  mean  to  say  that  the  term  "candy  cathartic"  has  not 
got  a  well  denned  meaning  in  the  English  language? 

"Maybe  in  the  English  language,  but  not  in  the  drug  trade,"  was 
the  retort.  "It  means  'Cascarets'  in  the  drug  trade." 

John  Rabotau,  a  St.  Louis  druggist,  testified: 

Q.  Do  you  know  how  people  ask  for  this  medicine?  Under  what 
name  or  style? 

A.  Usually  they  ask  for  "Cascarets,"  but  occasionally  some 
person  will  forget  the  name  and  describe  it. 

Q.    Describe  the  tablet? 

A.  Describe  the  tablet.  Sometimes  they  will  ask  for  "Candy 
Cathartic." 

Q.  Have  you  ever  had  an  instance  of  that  kind  where  they  de- 
scribed the  tablet  or  asked  for  "Candy  Cathartic"? 

A.    Yes,  very  often  they  forget  the  name. 

Q.    When  that  is  done  what  do  you  supply? 

A.    "Cascarets." 

Edward  Wolff,  another  druggist,  testified: 

Q.  Is  there  any  other  way  in  which  this  article,  this  remedy 
"Cascarets"  is  asked  for? 

A.     Yes,  sir. 

Q.    How? 

A.     The  name  "Candy  Cathartic". 

Q.  When  an  inquiry  is  made  for  "Candy  Cathartic"  what  do 
you  supply? 

A.    "Cascarets." 

Q.  Was  it  ever  refused  on  the  ground  that  that  was  not  what 
was  intended? 

A.     No,  sir;  the  names  are  synonymous. 

Edward  J.   Schall  testified: 

Q.  I  wish  to  ask  you  whether  you  are  familiar  with  the  way  in 
which  Meyer  Brothers  Drug  Co.  gets  orders  for  "Cascarets"? 

A.    Yes,  sir. 

Q.     How  are  they  ordered? 

A.  They  are  ordered  as  "Cascarets".  Sometimes  they  order  them 
as  "Candy  Cathartic".  I  have  also  seen  orders  written  Sterling 
Remedy  Company  tablets. 

Q.  When  Meyer  Bros.  Drug  Co.  gets  an  order  for  "Candy  Cathar- 
tic" what  does  it  send? 

A.     It  sends  "Cascarets". 

Q.  Does  it  ever  get  them  back  on  the  ground  that  they  are  not 
what  was  ordered? 

A.    Never. 

181 


RESTRAINING     UNFAIR     TRADE 

The  defendant's  own  trade  witnesses  admitted  that 
before  "Cascarets"  came  on  the  market  they  had  never 
heard  of  the  words  "Candy  Cathartic"  and  nobody  ever 
asked  for  such  a  thing;  that  after  "Cascarets"  came 
on  the  market  people  did  ask  for  "Candy  Cathartic" 
and  that  they  understood  by  such  requests  that  "Cas- 
carets" were  meant.  An  injunction  was  directed  against 
the  use  of  this  phrase. 

There  is  no  necessity  perhaps  of  further  citing  par- 
ticular cases.  Suffice  it  to  say  that  many  obviously 
descriptive  terms  have  been  protected  against  deceptive 
use  by  others  on  account  of  the  fact  that  they  had 
acquired  a  designative  significance  in  connection  with 
particular  articles.  Some  of  these  are  Silver  Pan  for 
preserves  made  in  silver  pans,  Horseshoe  Boilers,  Health 
Food,  Air  Cushion  Horseshoes,  Elastic  Seam  Under- 
wear, Turpentine  Shellac,  High  Standard  Varnish,  Co- 
hesive Tile,  Keep  Kleen  Brushes,  and  Beats-All  Pencils. 
The  fundamental  thing  in  cases  where  it  is  sought  to 
protect  descriptions  against  deceptive  use  by  others  is 
to  prove  that  the  description  has  by  usage  come  to 
point  distinctly  to  a  certain  article  as  its  identifying 
name.  The  less  obviously  descriptive  the  word  or  phrase 
is,  the  less  difficult  it  is  to  make  this  proof  and  in  some 
cases  where  the  word  is  mere  suggestion  rather  than 
a  description  or  where  the  description  is  more  or  less 
fanciful  and  remote  the  courts  protect  such  words  and 
phrases  with  very  little  proof  of  a  special  identifying 
significance  because  the  name  or  phrase  being  sugges- 
tive only  and  not  obviously  descriptive  the  presumption 
of  ownership  and  identification  is  in  proportion  to  its 
fancifulness. 

This  view  is  expressed  very  clearly  by  one  of  the 
courts  in  a  case  involving  an  infringement  concerning 
Holeproof  Hosiery,  where  it  is  contended  that  the  word 
"Holeproof"  was  a  mere  description.  "Nor  do  we  find 
any  particular  force,"  said  the  Court,  "in  the  objec- 
tion that  the  word  is  descriptive.  The  record  as  it  now 
stands  sufficiently  indicates  that  by  extensive  advertis- 

182 


DECEPTIVE     DESCRIPTIONS 

ing  and  large  sales  during  several  years  the  word  'Hole- 
proof'  has  acquired  a  secondary  meaning,  indicating  to 
the  prospective  purchaser  not  that  socks  sold  under 
it  are  indestructible  but  that  they  are  those  which  com- 
plainant is  making  and  is  supplying  to  consumers,  ap- 
parently to  their  entire  satisfaction."  Where,  however, 
the  name  or  phrase  is  an  accurate  and  obvious  descrip- 
tion a  good  deal  of  proof  is  required  and  in  cases  where 
it  is  a  necessary  description  it  is  probable  that  no 
amount  of  proof  could  establish  the  fact  of  exclusive 
identification  with  a  single  product.  How  far  particular 
words,  signs  or  pictures  identify,  in  any  particular 
case,  must  always  be  a  question  of  evidence,  and  the 
more  simple  the  phraseology  and  the  more  likely  it  is  to 
be  a  mere  description  of  the  article  sold,  the  greater 
becomes  the  difficulty  of  proof;  but  if  the  evidence  estab- 
lishes the  fact,  the  legal  consequences  follow. 

The  relief  granted  in  cases  involving  misuse  of  de- 
scriptions depends  upon  the  circumstances  and  no  hard 
and  fast  rule  can  be  laid  down.  Enough  limitations 
are  put  upon  the  defendant's  use  to  prevent  deceptive 
results.  Whatever  the  form  of  the  injunction  it  is  only 
such  a  form  as  prevents  the  mischief  pointed  to,  but 
what  in  each  case  or  each  trade  will  accomplish  the  pro- 
hibition intended  is  a  matter  which  must  depend  upon 
the  circumstances  of  each  case  and  the  peculiarities  of 
each  trade.  It  would  be  very  rash  in  advance  to  say 
how  far  a  thing  might  or  might  not  be  deceptive  with- 
out being  familiar  with  the  technology  of  the  trade. 

To  quote  the  language  of  one  of  the  judges  in  the 
"Camel  Hair  Belting"  case: 

What  right,  it  was  asked,  can  an  individual  have  to  restrain  an- 
other from  using  a  common  English  word  because  he  has  chosen  to 
employ  it  as  his  trade-mark?  I  answer,  he  has  no  such  right;  but  he 
has  a  right  to  insist  that  it  shall  not  be  used  without  explanation 
or  qualification,  if  such  a  use  would  be  an  instrument  of  fraud. 


183 


CHAPTER  XVIII 

DECEPTIVE  IMITATION  OF 
LABELS  AND  PACKAGES 


LABELS  and  packages  are  almost  always  visual  in 
their  appeal.  The  impression  created  on  the  mind 
of  the  retail  purchaser  is  through  the  sense  of  sight. 
He  remembers  a  label  as  a  thing  seen  before.  The  de- 
ception created  by  an  imitation  package  is  accomplished 
by  showing  to  the  eye  of  the  prospective  purchaser  a 
confusing  picture.  At  the  risk  of  repetition  it  may  be 
well  to  approach  the  question,  what  is  an  imitated  label 
or  package,  by  first  considering  the  purchaser  and  what 
we  know  about  him  and  how  the  courts  regard  him. 

Anyone  who  has  occasion  to  examine  the  cases  in- 
volving unfair  trading  by  the  imitation  of  labels,  pack- 
ages and  the  like,  must  at  once  be  struck  by  their  irre- 
concilable conflict.  While,  of  course,  the  facts  in  no 
two  cases  are  alike,  this  diversity  cannot  account  for 
the  variance  in  result.  The  rule  of  law  to  be  applied 
is  not  seriously  disputed;  there  is  substantial  agreement 
that  infringement  occurs  when  the  labels  or  packages 
of  one  trader  resemble  those  of  another  sufficiently  to 
make  it  probable  that  ordinary  purchasers  exercising 
no  more  care  than  such  persons  usually  do  in  purchas- 
ing the  article  in  question  will  be  deceived. 

The  person  to  be  considered,  the  courts  say,  is  not 
the  first  or  intelligent  purchaser,  but  the  ultimate  or 
ordinary  purchaser;  not  the  expert  or  the  careful  per- 
son, but  the  normal  everyday  purchaser,  or,  as  some 
judges  have  designated  him,  the  unpracticed  purchaser, 

184 


DECEPTIVE     LABELS     AND     PACKAGES 

the  inattentive  purchaser,  the  ignorant  purchaser,  or 
the  unwary  purchaser.  This  last  seems  by  far  to  be 
the  favorite  expression.  People  are  known  to  act  hur- 
riedly in  making  their  purchases  and  are  not  bound  to 
be  careful.  We  all  know  that  they  are  heedless  and 
inattentive  and  do  not  give  an  article  supplied  more 
than  a  casual  look.  Details  of  packages  are  not  re- 
membered. Makers'  names  are  not  observed%  In  de- 
ciding package  and  label  cases  all  these  things  are 
considered  by  the  courts. 

The  setting  of  the  stage  upon  which  the  unwary  pur- 
chaser performs  is  a  proper  subject  of  judicial  inquiry, 
therefore  evidence  of  the  customary  manner  of  exposing 
the  goods  in  question  for  sale  is  received.  The  names  and 
manner  of  familiar  identification  of  the  article,  and 
evidence  of  the  characteristics  of  the  unwary  purchaser 
himself  are  proper,  whether  he  is  intelligent  or  the  re- 
verse, educated  or  illiterate,  what  may  be  his  age, 
whether  a  child  or  mature,  and  his  station  in  life.  Ob- 
jectively the  unwary  purchaser  is  pretty  comprehen- 
sively investigated.  Subjectively,  .however,  he  seems  to 
have  been  wholly  neglected,  and  I  believe  that  the  irre- 
concilable conflict  among  the  decisions  is  due  to  this 
neglect. 

ANALYZING  LABELS  AND  PACKAGES  TO  DETERMINE  DECEPTION 

The  question  of  ike  likelihood  of  deception  is,  how- 
ever, one  which  the  courts  reserve  for  their  own  deter- 
mination. The  first  and  not  infrequently  the  only  step 
is  an  inspection  by  the  court  of  the  respective  labels. 
For  the  purpose  of  this  inspection  the  labels  are,  of 
course,  placed  side  by  side  and  the  defendant's  astute 
counsel  is  at  hand  to  point  out  and  dwell  upon  such 
differences  between  the  two  as  may  exist.  This  is  a 
privilege  which  the  "unwary  purchaser"  is  denied;  he 
does  not  know  that  there  are  two  labels;  still  less  has 
he  an  opportunity  to  make  a  side-by-side  comparison, 
and  he  has  not  the  assistance  of  able  counsel  to  help 

185 


RESTRAINING     UNFAIR     TRADE 

him  discriminate.  Some  courts  recognize  this  and  have 
said  so,  but  it  must  unconsciously  have  its  effect  and 
by  suggestion  tend  to  accentuate  the  differences* 

Equity  judges  certainly  are  better  equipped  mentally 
than  the  average  run  of  people  and  their  training  tends 
to  make  them  more  inclined  to  analyze  and  discriminate. 
Unconsciously  the  judge  projects  his  mentality  on  to  that 
of  the  "unwary  purchaser"  so  that  this  mythical  person 
becomes  judicially  quite  a  different  individual  from  the 
one  which  he  is  in  fact  and  is  transformed  into  what 
the  court  thinks  he  ought,  to  be,  and  more  frequently 
still  what  the  court  himself  is.  This  metamorphosis  of 
the  unwary  purchaser  is  all  in  the  direction  of  greater 
care  and  greater  ability  to  discriminate.  The  illiterate 
consumer  of  plug  tobacco,  as  he  is  in  fact,  would  in  all 
probability  not  recognize  himself  if  he  were  suddenly 
confronted  with  the  person  whom  the  court  strives  to 
protect  from  imposition  in  a  trade-mark  case  involving 
tin  tags.  His  judicially  injected  intelligence  and  per- 
ception would  doubtless  astonish  him.  Courts  cannot 
help  endowing  the  unwary  purchaser  with  a  part  of 
their  own  intellectuality  and  regard  with  impatience 
evidence  which  seeks  to  credit  him  with  less. 

Mr.  Justice  Farwell's  remarks  on  this  subject  are 
typical:  "They"  (the  trade  witnesses  called),  he  ob- 
served, "are  not  experts  in  human  nature,  nor  can  they 
be  called  to  give  such  evidence,  and  apart  from  admis- 
sibility,  one  cannot  help  feeling  that  there  is  a  certain 
proneness  in  the  human  mind  to  think  that  other  people 
are  perhaps  more  foolish  than  they  really  are.  I  do 
not  think  that  Carlyle  is  alone  in  his  estimate  of  the 
inhabitants  of  these  islands." 

The  following  illustrates  how  a  choleric  judge  con- 
siders the  testimony  of  trade  witnesses  in  these  cases: 

You  must  exercise  your  own  opinion  as  to  whether  what  they  are 
saying  is  sensible  or  can  be  accepted.  If  a  man  was  to  come  and 
tell  me  that  a  horse  was  like  a  cat,  he  might  swear  to  it,  and  you 
might  get  fifty  persons  to  swear  to  it,  but  I  should  not  act  on  such 
evidence,  because  it  is  pure  nonsense;  and  if  people  come  and  tell 
me  that  all  the  natives  of  India  are  of  the  same  class  of  intelligence, 

186 


9am 


The  French  tissue  label  on  the  left  was  the  complainant's.  A  competitor  was  en- 
joined from  using  the  one  at  the  right.  Afterward  the  label  below  was  adopted. 
The  chan"v  was  held  not  to  be  sufficient  to  prevent  deception  and  this  label  also 
was  enjoined.  The  upper  of  the  two  absorbent  cotton  labels  was  held  to  infringe 
the  lower  on  account  of  the  use  of  the  red  cross  upon  it.  The  use  of  the  garter  box 
on  the  right  was  enjoined  by  the  maker  of  Paris  garters.  Unfair  trading  was 
found  by  reason  of  the  general  imitative  get  up  and  approximation  of  catch 
phrases.  The  word  French  was  decided  to  be  an  unfair  simulation  of  Paris 


DECEPTIVE     LABELS     AND     PACKAGES 

and  some  people  think  they  are  all  exceedingly  sharp,  and  some 
think  that  they  are  all  exceedingly  stupid,  I  have  a  right  to 
bring  my  own  knowledge  of  the  world  into  play;  I  have  a  right  to 
bring  to  bear  that  knowledge  which  all  educated  people  have  who  have 
read  about  India  or  who  have  known  the  history  of  India,  and  to 
say  that  such  evidence  is  simply  absurd.  When  you  have  all  the 
different  castes  in  India,  and  the  actually  different  nationalities; 
when  you  have  all  the  different  educations  which  we  know  exist, 
and  there  is  the  highest  class  of  education,  and  we  know  that  there 
are  people  without  any  education  at  all;  we  know  that  there  are 
human  beings  made  in  the  same  way,  although  not  of  the  same 
color  as  we  are,  why  it  is  simply  absurd  to  come  and  tell  anybody 
with  senses  in  his  head  that  the  intelligence  of  all  these  people 
must  be  equal.  There  are  some  of  them  as  clever  as  any  Europeans, 
and  some  of  them  more  clever,  and  some  of  them  as  stupid  as  any 
Europeans,  and  I  suppose  it  is  difficult  to  be  more  stupid.  Therefore, 
that  evidence  cannot  be  received. 

Judicial  impatience  is  not  surprising  when  one  con- 
siders .  what  this  "evidence"  usually  consists  of.  Most 
of  it  is  pure  nonsense  and  the  transcript  of  trade  testi- 
mony in  some  unfair  competition  cases  reads  like  an 
extract  from  "Alice  in  Wonderland". 

"  'What  do  you  know  about  this  business  ?'  the  King 
said  to  Alice. 

"'Nothing,'   said  Alice. 

"  'Nothing  whatever?'   persisted  the   King. 

"'Nothing,  whatever,'  said  Alice. 

"  'That's  very  important,'  the  King  said,  turning 
to  the  jury.  They  were  just  beginning  to  write  this 
down  on  their  slates. 

"The  Red  Queen  shook  her  head.  'You  may  call  it 
nonsense  if  you  like,'  she  said,  'but  I've  heard  nonsense 
compared  with  which  that  would  be  as  sensible  as  a 
dictionary.' ': 

As  a  matter  of  fact  a  good  share  of  the  "evidence" 
of  trade  witnesses  is  nothing  but  gossip.  These  people, 
whatever  their  intelligence  may  be,  are  certainly  not 
trained  to  observe  correctly,  to  think  accurately  or 
clearly  to  express  what  they  see  or  think,  and  frequently 
their  ignorance  is  abysmal. 

Then  there  is  the  "unwary  purchaser"  himself.  Prob- 
ably he  knows  less  about  his  own  mental  processes  than 

189 


RESTRAINING     UNFAIR     TRADE 

anybody.  He  thinks  himself  infinitely  more  acute  than 
he  is,  he  is  disposed  to  resent  interrogation  and  suspect 
that  he  is  being  made  sport  of,  and  finally,  the  judges 
usually  pay  no  attention  to  his  own  estimate  of  himself. 
The  courts  are  getting  to  heed  less  and  less  the  testi- 
mony of  trade  "experts"  concerning  the  likelihood  of 
deception  by  imitated  labels.  Judges  will  not  surrender 
their  own  judgment  or  what  their  own  eyes  tell  them 
to  the  views  of  any  witness,  however  experienced.  This 
is  reasonable  enough,  for  after  all,  seeing  is  believing. 

The  question  of  what  resemblance  is  enough  to  de- 
ceive is  really  in  my  opinion  a  problem  in  practical 
psychology  to  be  solved  by  modern  laboratory  methods, 
by  experiment  with  enough  normal  people  to  make  gen- 
eralization safe.  Professor  Miinsterberg  has  been  con- 
ducting such  an  investigation  and  in  Chapter  XXII  of 
his  "Psychology  and  Industrial  Efficiency"  gives  an  ac- 
count of  the  results  so  far  obtained,  but  until  the  sub- 
ject develops  further,  we  must,  to  determine  the  ques- 
tion of  infringement,  depend  on  the  judge's  eyesight 
and  the  ability  he  thinks  he  has  to  tell  how  external 
things  will  affect  other  people's  minds — whether  one 
label  is  enough  like  another  to  deceive  the  average  pur- 
chaser— and  since  this  is  a  question  of  fact  and  not  of 
law,  the  guess  of  any  intelligent  person  on  this  is  as 
good  as  the  decision  of  the  most  learned  judge.  So 
instead  of  attempting  to  generalize  or  describe,  let  us 
for  a  moment  test  the  judgment  of  the  courts  with  our 
own. 

Below  are  illustrated  labels  and  packages  which  courts 
have  held  to  be  enough  alike  to  fool  the  public: 

The  injunction  went  against  the  name  "Iwanta"  as 
well  as  the  package,  the  court  observing,  in  holding  the 
name  an  infringement : 

The  incessant  use  of  the  personal  pronouns  in  daily  speech  has 
associated  in  every  one's  mind  the  sounds  represented  by  the  letters 
"I"  and  "U";  the  two  words  are  of  precisely  the  same  length;  both 
end  with  the  same  letter  "A";  and  both  express  the  same  idea; 
namely,  that  the  prospective  purchaser's  personal  comfort  would  be 
promoted  by  the  acquisition  of  a  biscuit. 

190 


Notice  the  striking  resemblance  in   idea,   design  and  lettering  between   these 

labels      When  the  case  came  into  court,  it  was  held  that  the  label  of  the  Seattle 

company  had  been  infringed  by  that  of  the  Los  Angeles  company 


DECEPTIVE     LABELS     AND     PACKAGES 


As  an  illustration  of  the  deceptive  effect  of  copying 
color  the  following  are  instructive.  The  familiar  "Inner 
Seal"  device  was  held  infringed  by  the  second  device 
shown,  which  was  printed  in  the  same  shade  of  red. 


Fairbank's  "Gold  Dust"  package  was  held  infringed 
by  the  package  shown  adjoining  it  on  page  207,  the  color 
on  both  boxes  being  orange  and  the  printed  matter  black. 

The  upper  of  the  two  beer  labels  on  page  191  was  held 
infringed  by  the  lower. 

While  differences  which  are  capable  of  discernment 
and  description  are  present  in  all  of  these  labels  it  is 
evident  that  in  the  hurry  of  retail  trading  they  would 
probably  escape  detection  and  deception  would  result. 
In  any  case,  however,  where  there  are  arguable  differ- 
ences between  the  labels  of  the  parties,  the  mere  prob- 
ability of  deception,  based  on  comparison  alone,  ought 
not  wholly  to  be  relied  on.  A  careful  and  systematic 
search  for  cases  of  actual  deception  and  mistake  should 
always  be  made.  Naturally  it  lends  enormous  weight 
to  an  argument  that  deception  is  probable  to  produce 
actual  instances  where  it  has  in  fact  occurred. 


193 


CHAPTER  XIX 

INFRINGEMENT  BY  IMITATION 
IN  FORM  AND  APPEARANCE 


HE  who  sets  out  to  design  a  label  is  a  free  agent. 
He  is  limited  only  by  his  own  ingenuity.  On  the 
other  hand  the  container  to  which  the  label  is  to  be  at- 
tached is  usually  a  fixed  quantity.  Bottles  and  boxes 
are  generally  pretty  much  alike — their  size  and  shape 
are  determined  by  the  nature  and  volume  of  their  con- 
tents and  not  by  the  taste  of  the  designer  of  them.  From 
the  very  nature  of  things  in  most  cases  there  can  be 
nothing  individual  and  distinctive  about  a  container. 
But  where  it  can  be  shown  that  there  is  something  in- 
dividual about  a  particular  container,  that  particular 
products  can  be  and  are  distinguished  from  others  by 
the  form  or  peculiarities  of  the  enclosure,  then  the  form 
or  peculiarity  is  protected  and  use  of  it  by  others  is 
restricted.  This  is  but  another  application  of  the  same 
rule  which  is  applied  in  place,  personal  and  descriptive 
name  cases.  There  can  be  no  exclusive  right  in  the 
name  of  a  place,  but  when  that  name  by  custom  has 
come  to  distinguish  a  particular  man's  goods,  deceptive 
use  by  others  of  the  place  name  will  be  stopped.  In 
the  absence  of  a  patent  there  can  be,  for  example,  no 
exclusive  right  to  use  a  particular  shaped  bottle,  but 
where  it  can  be  shown  that  unrestricted  use  by  another 
will  cause  his  goods  to  be  sold  as  those  of  the  man  who 
previously  used  the  peculiar  bottle,  the  law  steps  in 
and  places  such  limitations  upon  the  new  comer's  use 
as  will  prevent  the  defrauding  of  the  previous  user  and 

194 


DECEPTIVE     APPEARANCES 

the  deception  of  the  public.  The  identification  of  par- 
ticular goods  by  the  form  or  by  some  peculiarity  of  the 
enclosing  package  is  not  an  impossible  thing.  A  little 
thought  will  demonstrate  that  it  is  quite  common.  The 
square  Mount  Vernon  whiskey  bottle,  the  colored  cap- 
sules on  champagne  bottles,  the  high-shouldered,  short- 
necked  Hires  Root  Beer  bottle  are  examples  of  such 
peculiarities  which  have  been  protected  by  the  courts 
against  deceptive  imitation.  These  cases,  like  all  other 
cases  of  unfair  trade,  are  cases  of  fact.  Two  questions 
must  be  answered  affirmatively:  (1)  Does  the  form  or 
other  peculiarity  serve  to  distinguish  the  plaintiff's 
merchandise  from  the  similar  goods  of  others?  (2)  Is 
the  defendant  using  this  identifying  element  in  a  way 
which  is  calculated  to  represent  to  the  public  that  his 
goods  are  the  plaintiff's?  The  principle,  that  no  one 
has  any  right  to  represent  his  goods  as  the  goods  of 
another,  being  perfectly  general  in  its  application,  it 
necessarily  follows  that  an  affirmative  answer  to  these 
questions  must  result  in  the  prohibition  or  limitation  of 
the  use  of  the  form  or  peculiarity  of  package  which 
is  the  efficient  means  of  making  the  false  representation 
which  the  law  says  shall  not  be  made. 

PROTECTING  THE  SHAPE  AND  APPEARANCE 
OF  THE  CONTAINER 

As  an  illustration  of  the  application  of  this  rule,  take 
the  case  of  the  Mount  Vernon  whiskey  bottle. 

The  Hannis  Distilling  Co.  is  the  manufacturer  of  a 
whiskey  known  as  Mt.  Vernon  Rye.  It  was  the  custom 
of  dealers  to  buy  it  in  barrels  and  bottle  it,  and  sell  it 
under  the  name  of  "Mt.  Vernon".  The  Cook  &  Bern- 
heimer  Co.  obtained  by  contract  with  the  distiller  the 
exclusive  right  to  bottle  this  whiskey  at  the  distillery. 
The  United  States  Statutes  forbid  rectifying  within  six 
hundred  feet  of  a  distillery,  hence  the  location  of  the 
bottling  establishment  at  the  distillery  was  a  guaranty 
against  adulteration.  The  Hannis  Distilling  Co.  also 

195 


RESTRAINING     UNFAIR     TRADE 

gave  to  the  Cook  &  Bernheimer  Co.  the  right  to  place 
upon  their  labels  the  words  "Purity  guaranteed  by  the 
Hannis  Distilling  Co.".  Cook  &  Bernheimer  Co.  adopted 
for  its  bottling  of  "Mt.  Vernon"  whiskey,  a  peculiar 
square-shaped  bottle  with  a  bulging  neck,  and  it  ap- 
peared that  with  consumers  of  whiskey,  who  were  in  the 
habit  of  purchasing  their  beverage  over  the  bar,  this 
peculiar  form  of  bottle  was  relied  upon  as  a  means  of 
identifying  the  complainant's  bottling,  and  was  a  dis- 
tinctive means  of  distinguishing  Mount  Vernon  whiskey 
bottled  by  the  Cook  &  Bernheimer  Co.  from  other 
whiskies  and  from  other  bottlings  of  Mount  Vernon 
whiskey.  About  six  years  after  the  Cook  &  Bernheimer 
Co.  began  the  use  of  this  peculiar  bottle,  defendants, 
who  were  also  bottlers  of  Mount  Vernon  whiskey,  adopted 
a  square-shaped,  bulging  neck  bottle.  Defendants  dis- 
claimed all  fraudulent  intentions  and  claimed  that  the 
bottles  were  of  a  common  form  and  could  be  purchased 
at  any  bottlemaker's,  and  insisted  that  they  were  doing 
only  what  they  lawfully  were  entitled  to  do.  In  grant- 
ing an  injunction  the  Court  observed: 

Despite  the  defendants'  denial,  and  they  only  deny  intent  to  de- 
ceive the  public,  not  intent  to  use  the  form  of  package  just  like 
complainant's,  the  court  cannot  escape  the  conviction  that  they 
found  the  square-shaped  bottle  convenient  and  useful,  because  it  was 
calculated  to  increase  the  sale  of  their  goods,  and  that  such  in- 
crease, if  increase  there  be,  is  due  to  the  circumstance  that  the  pur- 
chasers from  defendants  have  a  reasonable  expectation  that  the 
ultimate  consumer,  deceived  by  the  shape,  will  mistake  the  bottle 
for  one  of  complainant's.  This  is  unfair  competition  within  the 
authorities,  and  should  be  restrained. 

It  will  be  seen  that  in  this  case  the  circumstances  of 
sale  were  a  material  consideration  in  determining  the  fact 
that  the  complainant's  bottling  was  identified  by  the  form 
of  bottle.  It  was  established  that  those  who  buy  drinks 
over  the  bar,  whether  on  account  of  previous  potations 
or  otherwise,  were  in  the  habit  of  recognizing  complain- 
ant's bottling  by  the  form  of  the  enclosure  rather  than 
by  the  label  upon  it,  and  it  appeared  as  a  fact  in  this  case 
that  the  labels  upon  the  complainant's  bottles  and  those 

196 


DECEPTIVE     APPEARANCES 

upon  the  defendants'  were  quite  distinct.  The  element 
of  deception  was  the  shape  and  appearance  of  the  bottle. 

In  litigation  brought  by  the  Charles  E.  Hires  Co. 
against  the  Consumers  Co.  over  carbonated  root  beer,  a 
somewhat  similar  condition  of  affairs  obtained.  Hires' 
Root  Beer  is  usually  dispensed  from  ice  boxes.  The  bot- 
tles come  in  contact  with  the  ice  and  the  labels  are  very 
easily  washed  off,  so  that  in  the  customary  method  of 
serving  the  product,  the  label  was  not  and  could  not  be  a 
means  of  identification.  The  Hires  Company  thereupon  set 
about  devising  an  unmistakable  means  of  identifying  their 
product  in  the  absence  of  a  label,  and  selected  a  peculiar 
shaped  cylindrical  bottle  with  high  shoulders  and  a  short 
neck.  The  Consumers  Company,  of  Chicago,  for  the 
purpose  of  bottling  their  root  beer,  adopted  the  same 
shape  of  bottle,  though  their  beverages  other  than  root 
beer  were  put  in  bottles  of  different  shape.  The  Court  be- 
low granted  a  partial  injunction,  not  broad  enough,  how- 
ever, to  include  the  shape  of  the  package.  The  Court 
of  Appeals  held  that  any  restraint  which  did  not  include 
the  form  of  bottle  would  be  ineffective  to  prevent  decep- 
tion and  an  injunction  was  granted  which  included  the 
form  of  the  bottle. 

Other  cases  of  a  similar  kind  are  scattered  through 
the  reports. 

Sawyer's  Bluing  in  a  cylindrical  box  with  a  blue  label 
and  a  red  disc  at  the  top  was  protected  against  an 
imitation  in  color  and  getup. 

The  Moxie  Nerve  Food  Co.  for  a  while  used  a  cham- 
pagne bottle  as  an  enclosure  and  proceeded  against  a 
bottling  establishment  putting  up  a  beverage  similar  in 
taste,  flavor  and  appearance  in  the  same  sort  of  bottle. 
An  injunction  was  granted,  which  was  broad  enough  to 
include  the  shape  of  the  package. 

As  has  been  indicated  by  the  discussion  of  the  Hires 
and  Mt.  Vernon  whiskey  cases,  the  law  of  unfair  trade 
adapts  itself  to  the  circumstances  in  the  particular  case. 
In  those  cases  it  was  shown,  owing  to  the  manner  in  which 
the  goods  were  customarily  sold,  that  the  form  of  the 

197 


RESTRAINING     UNFAIR     TRADE 

enclosure  was  an  important  identifying  element.  There- 
fore, the  deceptive  imitation  of  that  form  was  stopped. 
In  the  same  way,  in  a  number  of  cases  involving  the 
capsules  of  champagne  bottles,  it  was  shown  that  cham- 
pagne is  dispensed  from  coolers;  that  the  bottle  is  liable 
to  lose  its  labels  before  it  is  sold  to  the  customer;  that 
the  bottle,  in  serving,  is  covered  with  a  napkin,  so  that 
in  such  cases  the  capsule  is  the  only  easily  available 
means  of  identification,  and  while  the  courts  realize  that 
in  view  of  the  widespread  use  of  capsules  and  the  limited 
number  of  colors  that  it  is  possible  to  use,  it  is  inequit- 
able to  confer  upon  any  one  producer  an  exclusive  right 
to  a  certain  color,  they  have  not  hesitated  to  state  that 
where  a  colored  capsule  is  used  in  such  a  way  as  to 
delude  the  customer  into  the  belief  that  one  producer's 
wine  is  another's,  appropriate  relief  will  be  accorded. 

PROTECTING  THE  ORNAMENTATION  OF  THE  ARTICLE 

From  protecting  the  form  of  enclosures  and  contain- 
ers, the  step  to  the  protection  of  the  ornamentation  and 
appearance  of  the  article  itself  was  natural  and  easy. 
As  a  matter  of  fact,  the  painting  and  decoration  of  an 
article,  like  a  coffee  mill,  a  scale  and  the  like,  is  exactly 
analogous  to  the  application  of  a  label  to  a  package. 
There  is  room  for  the  play  of  fancy  and  the  designer 
is  not  limited  by  considerations  of  utility.  Take  the  case 
of  a  coffee  mill;  it  can  be  painted  any  color  of  the  spec- 
trum. It  can  be  gilded,  silvered  or  bronzed  and  can 
be  ornamented  in  any  way  that  fancy  dictates.  There 
is  no  hardship  then  when  a  particular  make  is  identified 
by  a  particular  ornamentation,  in  insisting  that  others 
making  similar  goods  decorate  them  in  an  original  or 
at  least  not  in  an  imitative  fashion. 

The  Enterprise  Manufacturing  Company  for  a  great 
many  years  were  manufacturers  of  coffee  mills,  and  for 
a  long  period  they  cast  their  mills  in  a  particular  shape 
and  design  and  colored  and  decorated  them  so  that 
they  soon  became  readily  identified  by  their  character- 

198 


DECEPTIVE     APPEARANCES 

ifftic  appearance.  Landers,  Frary  &  Clark  started  to 
compete  with  the  Enterprise  in  the  line  of  coffee  mills, 
conforming  their  goods  to  the  Enterprise  Manufacturing 
Company's  in  size  and  general  shape,  as  well  as  in  all 
minor  details  of  structure,  every  line  and  curve  being 
reproduced  and  superfluous  metal  put  into  the  driving 
wheels  to  produce  a  strikingly  characteristic  effect,  while 
the  goods  were  so  dressed  with  combinations  in  color, 
with  decorations  reproduced  or  closely  simulated  with 
style  of  lettering  and  details  of  ornamentation,  that  ex- 
cept for  the  fact  that  on  the  one  mill  was  found  the 
name  "Enterprise  Manufacturing  Co."  and  on  the  other, 
"Landers,  Frary  &  Clark,"  it  was  difficult  to  tell  them 
apart.  The  Court  held  that  this  was  an  aggravated 
instance  of  unfair  trading  and  enjoined  its  continuance. 

In  other  cases,  copying  of  peculiarities  of  structure, 
not  including  the  shape  of  the  article  itself,  has  been 
enjoined.  In  one  case  the  construction  of  an  oven  in  a 
stove  with  white  enamel  lining  was  held  to  be  a  possible 
ground  for  complaint  by  one  manufacturer  who  had  pre- 
viously used  such  a  construction  to  the  extent  that  his 
goods  were  called  "white  enamel  stoves". 

In  another  a  bill  which  sought  to  enjoin  the  imitation 
of  the  gilding  on  horse  shoe  nails  was  held  to  state  a 
cause  of  action. 

PROTECTING  THE  STRUCTURE  OF  THE  ARTICLE 

All  of  these  things  had  to  do  with  the  more  or  less 
arbitrary  decoration  or  ornamentation  of  an  article. 
When  it  came,  however,  to  the  imitation  of  the  structure 
of  the  thing  itself,  much  difficulty  was  experienced,  be- 
cause it  is  plain  that  articles  for  similar  purposes  will 
be  more  or  less  alike.  All  loaves  of  bread  are  on  the 
same  general  line;  all  carpet  sweepers;  all  automobile 
lamps;  all  padlocks  more  or  less  resemble  each  other. 
But  in  spite  of  this,  it  is  conceivable  that  certain  articles 
may  be  identified  and  distinguished  from  others  by  their 
mere  structure,  and  that  the  use  by  another  of  the  same 

199 


RESTRAINING     UNFAIR     TRADE 

structure  without  affirmative  means  of  distinguishing  will 
work  a  fraud  upon  the  public. 

For  example,  when  "Cascarets"  were  first  placed  upon 
the  market,  the  tablets  were  arbitrarily  made  in  an 
octagonal  form,  as  shown.  A  competitor  put  upon  the 
market  a  similar  product,  unnecessarily  casting  his  tab- 
lets in  the  similar  form,  shown  in  the  second  illustration: 


G  C 
C  C 


It  was  held,  in  a  suit  brought  to  restrain  the  shape  of 
the  tablet,  as  well  as  other  imitated  features,  that  the 
Cascaret  tablet,  apart  from  the  box,  could  be  and  was 
distinguished  from  others  by  means  of  its  shape  and  that 
the  unnecessary  assumption  of  that  shape  by  a  competi- 
tor was  unfair  and  enjoinable. 

The  Yale  &  Towne  Manufacturing  Co.  succeeded  in 
enjoining  a  competitor  from  making  a  padlock  in  exact 
imitation  of  the  Yale  lock. 

The  Supreme  Court  of  California  went  so  far  as  to 
hold  that  the  imitation  of  the  architecture  of  a  store 
front  was  unfair.  There  is  a  department  store  in  the 
City  of  Sacramento,  called  "Mechanics'  Store".  The 
architecture  of  the  building  is  peculiar  and  unusual.  The 
defendant,  on  a  lot  adjoining  the  plaintiff's,  erected  a 
building  identical  in  architecture  with  plaintiff's  build- 
ing, opened  a  department  store  and  called  it  "The  Me- 
chanical Store".  The  court  enjoined  the  use  of  the  name 
"Mechanical"  as  an  infringement  of  the  trade  name  "Me- 
chanics", and  further  ordered  that  the  defendant  in  the 
conduct  of  his  business  "distinguish  his  place  of  business 
from  that  in  which  the  plaintiff  is  carrying  on  its  busi- 
ness, in  some  mode  or  form  that  shall  be  a  sufficient  indi- 
cation to  the  public  that  it  is  a  different  place  of  busi- 
ness from  that  of  the  plaintiff". 

200 


DECEPTIVE     APPEARANCES 

In  another  case  the  complainant  manufactured  zithers, 
which  were  in  somewhat  an  unusual  shape.  The  defend- 
ant made  a  zither  in  all  respects  the  same  and  refrained 
from  putting  its  name  upon  it,  with  the  result  that  con- 
fusion ensued.  The  Court  required  the  defendant  to 
place  his  name  upon  the  zithers  of  his  manufacture. 

George  C.  Fox  Co.,  of  Charlestown,  Mass.,  had  some 
interesting  cases  involving  the  shape  of  a  loaf  of  bread. 
Its  bread  is  put  up  in  an  oval  loaf,  as  shown  on  page  179. 
After  the  Fox  bread  had  acquired  a  valuable  reputation, 
other  bakers  began  to  put  upon  the  market  bread  under 
similar  names  and  with  loaves  closely  imitating  the  shape 
and  appearance  of  those  in  which  Fox  had  been  accus- 
tomed to  sell  his  bread.  The  courts  have  uniformly  en- 
joined the  duplication  of  the  visual  appearance  of  the 
loaf  on  the  ground  that  the  imitation  of  the  distinctive 
Fox  loaf  would  result  in  deception  and  constituted  unfair 
competition. 

Similarly  the  Coca-Cola  Company  has  succeeded  in 
enjoining  the  deceptive  imitation  of  the  color  of  Coca- 
Cola  where  it  was  shown  that  a  competitor's  product  was 
unnecessarily  and  artificially  colored  to  resemble  Coca- 
Cola.  The  Court  rested  its  conclusion  upon  the  fact 
that  the  imitative  color  was  adopted  as  a  means  of  aid- 
ing a  contemplated  fraud,  and  that  even  if  its  adoption 
were  also  in  part  innocent,  confusion  was  caused  by  rea- 
son of  the  imitative  color;  that  the  burden  was  upon 
the  defendant  to  see  to  it  that  ultimate  fraud  did  not 
result  from  this  confusion,  and  in  so  far  as  the  defend- 
ant could  not  safeguard  this  result  he  should  not  be 
permitted  to  use  the  color,  and  that  since  it  was  not 
apparent  how  deception  could  be  efficiently  prevented, 
save  by  giving  defendant's  product  a  non-deceptive  color, 
defendant  was  enjoined  from  selling  his  syrup  of  the  same 
or  substantially  similar  color  to  Coca-Cola. 

The  law  on  unfair  trading  with  respect  to  the  imita- 
tion of  structure  or  visual  appearance  of  an  article  is 
not  settled.  The  difficulty  is  to  determine  the  question 
whether  the  structure  or  visual  appearance  of  the  de- 

201 


RESTRAINING     UNFAIR     TRADE 

fendant's  article  results  from  necessity  or  whether  it  is 
a  pretext  merely.  In  the  case  of  machines  the  unneces- 
sary duplication  of  non-functional  parts  is  presumptively 
fraudulent.  In  a  case  brought  by  the  Singer  Manufac- 
turing Co.  it  appeared  that  on  the  Singer  machine  there 
was  a  patented  set  screw.  The  defendant  imitated  the 
machines  exactly.  Not  daring  to  use  the  patented  con- 
struction of  the  set  screw,  it  placed  a  dummy  screw, 
serving  no  useful  purpose  whatever,  on  its  machine  at  the 
precise  point  where  the  patented  screw  was  on  the  Singer 
machine.  The  Supreme  Court  held  that  this  was  evi- 
dence of  fraud  and  it  was  one  of  the  controlling  circum- 
stances in  the  case.  So,  where  it  can  be  shown  that  com- 
plainant's distinctive  structure  is  imitated  by  the  defend- 
ant, not  for  the  purpose  of  mechanical  efficiency,  but  un- 
necessarily and  for  the  purpose  of  imitation,  it  is  safe 
to  say  that  appropriate  restraint  will  be  imposed. 

On  the  other  hand,  where  the  defendant  is  using  for  the 
purpose  of  increasing  the  efficiency  of  his  device,  a  shape 
of  apparatus  which  is  desirable  mechanically,  even  when  it 
is  a  possible  means  of  accomplishing  unfair  trade,  the 
courts  are  reluctant  to  interfere,  and  as  far  as  they  are 
disposed  to  go  is  to  require  that  the  defendant  by  a  name 
plate  or  other  appropriate  means  distinguish  his  manu- 
facture from  that  of  the  complainant.  The  better  rule 
seems  to  be  that  the  unnecessary  imitation  of  a  non-func- 
tional part  should  always  be  enjoined;  that  the  use  of  a 
shape  or  configuration  of  an  article,  even  though  it  has 
become  identified  with  another  producer's  goods,  will  not 
be  interfered  with,  but  where  deception  will  follow  such  a 
use  if  unexplained,  the  defendant  will  be  required  by  the 
use  of  a  name  plate  or  in  some  other  unmistakable  way 
plainly  to  state  that  the  article  is  of  his  production  and 
thus  to  counteract  by  positive  statement  the  implied  mis- 
representation that  the  structure  of  the  article  itself 
conveys. 


202 


CHAPTER  XX 

EQUIVALENTS  THAT  DECEIVE 
BUYERS 


VARIOUS  aspects  of  the  subject  of  unfair  trading 
have  been  discussed;  the  imitation  of  names  which 
are  an  appeal  directed  both  to  the  eye  and  to  the  ear, 
though  their  primary  purpose  is  verbal  identification, 
and  the  deceptive  effort  of  the  pirate  devoted  to  verbal 
confusion;  the  imitation  of  labels  and  packages  which 
are  largely  visual  in  their  appeal  and  the  parasite's  at- 
tempt to  deceive  by  presenting  a  confusing  picture.  We 
come  now  to  a  phase  of  unfair  trading  which  is  more 
elusive  than  either — where  the  deception  is  neither  di- 
rectly verbal  nor  visual,  but  is  essentially  psychological 
and  where  the  attempt  is  to  confuse  the  mind  of  the  pros- 
pective purchaser,  not  by  imitation  of  name  or  appear- 
ance, but  by  the  use  of  some  ingeniously  deceptive  con- 
trivance by  which  he  may  be  so  mentally  befogged  and 
indirectly  confused  that  a  spurious  product  may  be 
sold  to  him  when  he  thinks  he  is  getting  the  genuine. 
These  cases  are  based  on  the  postulate  that  while  trade 
names  and  brands  are  known  and  recognized,  the  pub- 
lic does  not  know  the  names  of  the  producers  of  the 
articles  it  consumes.  Retail  purchasers  are  not  expected 
to  know  or  have  in  mind  the  names  of  makers,  and  as  a 
matter  of  fact,  they  do  not  know  and  usually  do  not 
care  anything  about  the  producer  as  a  personality.  This 
is  true  generally,  but  is  frequently  lost  sight  of  in  dis- 
cussing cases  of  unfair  trading.  We  talk  of  the  sec- 
ondary or  trade  meaning  of  place  or  personal  names — 

203 


RESTRAINING     UNFAIR     TRADE 

that  a  "Waltham  Watch"  means  a  watch  produced  by 
the  Waltham  Watch  Company ;  that  "Pillsbury's  Flour" 
means  flour  made  by  the  Pillsbury  Flour  Mills  Co.; 
that  "Blue  Ribbon  Beer"  is  Pabst's  beer;  that  "Bud- 
weiser"  is  Anheuser-Busch's,  and  the  like.  The  con- 
sumer has  no  such  definite  knowledge.  Of  course,  he 
knows  Pillsbury's  Flour,  to  use  that  as  an  example.  If 
the  average  person  were  asked  what  he  means  by  Pills- 
bury's Flour,  the  answer  is  "Pillsbury's  Flour,  of  course". 
The  following  is  a  brief  transcript  of  certain  testi- 
mony taken  in  a  case  involving  the  use  of  the  name 
"Baker"  for  chocolate  and  shows  the  mind  of  the  con- 
sumer better  than  any  amount  of  windy  disquisition.  Ed- 
ward A.  Keil,  a  San  Francisco  grocer: 

We  never  have  occasion  to  call  it  "Walter  Baker's",  I  had  to  look 
on  this  package  to  find  out  what  his  first  name  was.  I  had  really 
forgotten  it. 

Mrs.  J.  C.  Echols,  Columbus,  Nebraska,  a  housekeeper 
for  twenty-one  years  and  familiar  with  Baker's  chocolate 
all  that  time,  said: 
Well,  it  is  Baker's.  I  don't  know  that  I  noticed  the  name  of  it. 

Mrs.  Julia  McGowen,  Columbus,  Nebraska: 

I  just  call  for  Baker's  chocolate  and  I  supposed  that  was  the 
only  kind.  I  thought  it  was  just  Baker's.  I  didn't  know  what 
his  other  name  was. 

W.  J.  Eisenman,  Columbus,  Nebraska: 

I  don't  know  whether  the  man's  name  is  Walter  or  Peter  or  what 
it  is.  Baker's,  that  is  all  I  know.  That  is  all  I  have  paid  any 
attention  to. 

In  the  same  way  Waltham  Watches  are  "Waltham 
Watches",  Blue  Ribbon  Beer  "Blue  Ribbon  Beer",  and 
so  on. 

Naturally  when  the  brand  name  is  a  surname,  it  is 
usually  a  part  of  the  name  of  the  producer  and  the  con- 
nection between  the  two  is  more  likely  to  be  made,  though 
even  here,  as  shown  by  the  quotations  just  given,  it 
frequently  is  not  made,  but  where  the  brand  is  a  device 
or  fancy  word,  or,  in  fact,  anything  but  the  producer's 

204 


EQUIVALENTS     THAT     DECEIVE 

name,  or  a  part  of  it,  it  is  rare,  indeed,  for  the  average 
consumer  to  know  who  makes  the  brands  he  buys.  He 
knows  the  brand  or  mark  of  identification  and  seeing  that 
goes  no  further.  As  a  matter  of  fact,  the  very  purpose 
of  a  trade-mark  is  to  give  to  the  purchaser  such  a  cer- 
tain, ready  and  instant  means  of  distinguishing  the  par- 
ticular article  desired,  that  there  is  no  necessity  for  him 
to  look  for  producers'  names,  addresses  and  the  like. 
When  it  is  said,  therefore,  that  a  name  means  a  certain 
producer's  goods  or  that  a  device  or  package  identifies 
a  certain  producer's  commodity,  it  implies  only  that  the 
name  or  device  identifies  a  certain  article  as  a  commer- 
cial entity,  a  thing  which,  in  fact,  is  of  a  certain  origin, 
but  which  the  purchaser  recognizes  simply  as  an  article 
that  by  faith  or  experience  he  believes  to  be  good  and 
as  to  the  personality  of  whose  maker  he  has  no  knowledge 
or  curiosity.  This  fact,  which  the  courts  have  come  to 
recognize,  is  an  important  circumstance  in  the  decision 
of  cases  involving  indirect  infringement.  It  is  frequently 
argued  by  defendants  in  these  that  there  can  be  no 
identification  of  a  name  with  a  certain  producer  unless 
the  producer  as  a  personality  is  known.  Such  an  argu- 
ment was  disposed  of  by  a  distinguished  English  judge 
as  follows: 

I  think  that  the  fallacy  of  the  appellants'  argument  rests  on  this 
—that  it  is  assumed  that  one  trader  cannot  be  passing  off  his 
goods  as  the  manufacture  of  another  unless  it  be  shown  that  the 
persons  purchasing  the  goods  know  of  the  manufacturer  by  name,  and 
have  in  their  mind  when  they  purchase  the  goods  that  they  are 
made  by  a  particular  individual.  It  seems  to  me  that  one  man 
may  quite  well  pass  off  his  goods  as  the  goods  of  another  if 
he  passes  them  off  to  people  who  will  accept  them  as  the  manufac- 
ture of  another,  though  they  do  not  know  that  other  by  name  at  all. 

DISHONEST  SELLING  BY  INDIRECT  DECEPTION 

Many  illustrations  of  similar  roundabout  deception 
readily  suggest  themselves.  When  the  Pabst  Brewing 
Company,  both  as  an  ornament  and  as  a  badge  of  iden- 
tification, tied  a  blue  ribbon  about  the  necks  of  bottles 
containing  a  brew  of  fine  light  beer,  which  was  labeled 

205 


RESTRAINING     UNFAIR     TRADE 

"Select",  people  immediately  began  to  call  for  this  beer 
as  "Blue  Ribbon",  though  these  words  nowhere  appeared 
in  connection  with  it.  No  one  paid  any  attention  to  the 
name  "Select",  which  the  beer  had  been  christened,  and 
which  was  conspicuously  printed  on  label  and  capsule. 
Everybody  knew  "Blue  Ribbon",  no  one  "Select".  "Blue 
Ribbon"  meant  Pabst's  beer,  and  nothing  else,  and  it 
was  "Blue  Ribbon  Beer"  that  was  called  for,  whether 
those  words  were  on  the  label  or  not).  A  rival  brewer 
then  put  out  a  beer  with  no  bit  of  ribbon  tied  to  the 
bottle,  but  with  the  words  "Blue  Ribbon  Beer"  printed 
upon  the  label,  and  claimed  a  right  superior  to  Pabst  by 
priority  of  use.  The  question  to  be  answered  was — 
what  does  "Blue  Ribbon"  mean?  Pabst's  beer,  of  course. 
Not  Pabst's  by  name  as  a  personality  or  an  establish- 
ment perhaps,  but  Pabst's  in  the  sense  of  the  brewery 
which  has  always  produced  the  article  known  as  "Blue 
Ribbon"  beer.  The  beer  with  the  words  "Blue  Ribbon" 
on  the  label  was  not  "Blue  Ribbon"  beer  in  that  sense, 
but  was  falsely  representing  to  be.  The  thirsty  citizen 
who  ordered  "Blue  Ribbon"  beer  and  was  served  with 
the  product  labeled  "Blue  Ribbon"  was  not  getting  the 
thing  he  had  had  before,  whether  he  knew  the  name  Pabst 
or  not,  and  therefore  he  was  deceived.  Hence  its  use  by  the 
second  brewer  was  an  infringement.  It  was  through  this 
rather  circuitous  method  of  reasoning  that  the  Pabst 
Brewing  Company's  undoubted  rights  in  the  designation 
"Blue  Ribbon"  were  secured  to  it. 

HOW  THE  USE  OF  EQUIVALENTS  RESULTS 
IN  UNFAIR  TRADING 

It  may  be  laid  down  as  a  general  rule  that  if  the  goods 
of  a  manufacturer  have  from  the  mark  or  device  he  has 
used  become  known  in  a  market  by  a  particular  name, 
the  adoption  by  a  rival  trader  of  any  contrivance  which 
will  cause  his  goods  to  bear  the  same  name  in  the  market 
is  as  much  a  violation  of  the  rights  of  the  original  man- 
ufacturer as  the  actual  copy  of  his  device. 

206 


Both  washing-powder  packages  bore  orange-colored  wrappers  with  printing  in 

black.     The  "Buffalo"  package  infringed.    The  right  beer  label  was  unlawful  in 

that  its  use  caused  the  defendant's  goods  to  l>ear  the  same  popular  name  as  that 

given  to  the  plaintiff's.    The  "Knoxall"  pencil  was  also  held  to  infringe 


EQUIVALENTS     THAT     DECEIVE 

As  an  illustration  of  the  application  of  this  principle, 
Hutchinson,  Pierce  and  Company  used  the  label  shown 
in  the  lower  left  hand  on  page  179  upon  shirts  of  their 
manufacture.  As  a  result  their  product  became  known  as 
"Star  Shirts".  A  Chicago  haberdasher  placed  the  mark 
shown  in  the  next  figure  upon  the  shirts  he  sold.  It  was 
enjoined  as  an  infringement,  because  it  might  cause  de- 
fendant's goods  to  be  sold  as  "Star  Shirts"  and  give 
color  to  a  claim  that  defendant's  goods  were  "Star" 
goods,  and  hence  the  goods  of  the  complainant. 

Baker's  cocoa  and  chocolate  have  long  been  identified 
by  the  familiar  chocolate  girl  figure  (see  page  179),  as 
well  as  by  the  name  "Baker".  This  has  for  years  ap- 
peared upon  the  packages  and  is  a  ready  means  of  visual 
identification.  The  product  was  very  commonly  called 
for  by  purchasers  as  "the  chocolate  with  the  picture  of 
the  woman,"  "the  chocolate  with  the  girl  on  it,"  "the 
chocolate  with  the  picture  of  the  lady". 

The  Puritan  Pure  Food  Company  put  out  a  chocolate 
with  the  picture  at  the  right  (page  179)  on  the  label.  It 
was  enjoined  as  likely  to  cause  the  defendant's  goods  to 
be  known  by  the  same  name;  viz.,  "The  chocolate  with 
the  girl  or  lady",  as  that  by  which  the  complainant's  had 
long  been  designated. 

The  American  Tin  Plate  Company  and  its  predeces- 
sors for  many  years  made  roofing,  which  they  identified 
by  the  first  brand  shown  below,  the  letters  "MF"  in  a 
monogram  enclosed  by  a  circle. 

As  a  result  the  product  became  known  and  identified 
as  "MF"  terne  plate,  was  so  specified  by  architects  and 
dealt  in  by  the  trade.  The  defendant,  a  rolling  mill  in 
Northern  Kentucky,  began  the  manufacture  of  terne  plate 
under  the  other  brands  shown. 

In  justification  of  their  use  it  was  asserted  that  the 
letters  were  the  initials  of  a  man  named  Herman  and  they 
had  secured  authority  from  him  to  use  them.  It  ap- 
peared that  Herman  was  an  obscure  cornice  maker  in 
Newport,  Kentucky.  The  Court  viewed  the  justification 
with  some  suspicion,  but  without  passing  upon  it,  de- 

209 


RESTRAINING     UNFAIR     TRADE 

cided  that  the  use  of  the  letters  "MF"  by  the  defendant, 
even  when  coupled  with  the  other  letters,  was  calculated 
to  cause  its  terne  plate  to  be  known  as  "MF"  terne  plate, 


which  was  the  name  by  which  complainant's  product  had 
long  been  distinguished,  and  granted  an  injunction. 

1C.       1C 

M.FE,  M.F7H. ,  M.FH. 
EXTRA.  BEST. 

The  classic  example  of  this  sort  of  infringement  is 
what  is  known  as  the  "Dog's  Head  Beer"  case.  The  com- 
plainants were  a  firm  engaged  in  bottling  Bass's  ale.  To 
indicate  their  bottling  they  used  the  now  familiar  label 
showing  a  picture  of  a  bull  dog  and  the  words  "The  Bull 
Dog  Bottling"*  illustrated  on  page  207. 

On  account  of  the  picture  of  the  dog's  head,  Read 
Brothers'  bottling  became  well  known  in  the  British 
Colonies  as  "Dog's  Head  Beer".  The  defendants,  also 
bottlers  of  ale,  invaded  the  colonial  markets  of  Read 
Brothers,  and  in  these  districts  used  upon  their  ale  a 
label  (page  207)  showing  the  picture  of  a  terrier  and 
the  words  "The  Celebrated  Terrier  Bottling".  As  far 
as  the  physical  resemblance  between  the  two  labels  was 
concerned,  there  was  none  at  all.  The  complainant's 
was  blue,  the  defendant's  red — the  backgrounds  black 
and  the  dogs'  heads  buff.  No  two  dogs  could  be  less 
alike  and  still  be  dogs,  but  when  it  was  shown  as  a  fact 
that  Read  Brothers'  bottling  was  known  as  "Dog's  Head 

•Reproduced  from  Cox  Manual  of  Trade-Mark  Cases. 

210 


EQUIVALENTS     THAT     DECEIVE 

Beer"  and  that  the  use  by  the  defendants  of  the  picture 
of  a  terrier  would  enable  their  beer  to  be  described  and 
sold  as  "Dog's  Head  Beer", — an  injunction  was  granted 
to  restrain  the  use  of  any  device  which  would  cause 
the  defendants'  goods  to  bear  the  same  name  in  the 
market  as  the  complainant's.  This  is  apparently  an 
extreme  case,  but  is  cited  as  an  illustration  of  the  length 
to  which  courts  go  to  secure  to  a  trader  the  full  benefit 
of  the  reputation  and  business  which  he  has  built  up 
and  the  efficiency  with  which  they  unmask  and  stop 
any  schemes,  however  subtle,  by  means  of  which  others 
attempt  to  steal  this  business  away. 


211 


CHAPTER  XXI 

REFILLED  PACKAGES,  SUBSTI 
TUTION  AND  PASSING  OFF 


NO  LEGAL  difficulty  is  involved  in  this  species  of 
unfair  trading.  Anyone  indulging  in  it  is  guilty 
of  a  commonplace,  clumsy,  vulgar  fraud.  The  only 
trouble  is  in  the  detection  of  the  offense.  The  defend- 
ants are  usually  persons  of  little  consequence  and  no 
morality,  restaurant  and  saloonkeepers,  soda  water  dis- 
pensers, barbers  and  the  like,  who,  when  setting  up  in 
business,  buy  a  bottle  or  two  of  a  reputable  article  which, 
as  the  supply  is  consumed,  without  obliterating  the  gen- 
uine labels,  is  refilled  with  imitation  goods.  The  original 
bottle,  like  Fortunatus'  purse,  is  inexhaustible.  The 
makers  of  Lea  &  Perrin's  Sauce,  Pinaud's  Hair  Tonic, 
Horlick's  Malted  Milk  and  other  well  known  articles  are 
continually  subjected  to  this  sort  of  fraud,  which  is 
dangerous  and  insidious  and  almost  impossible  to  detect. 
The  pirate  carefully  retains  in  his  own  possession  the 
decoy  genuine  bottle,  from  which  he  dispenses,  and  the 
defrauded  purchaser  has  only  his  sense  of  taste  or  smell 
to  safeguard  his  pocketbook.  Usually  the  evidence  sub- 
mitted to  counsel,  when  it  is  attempted  to  stop  this 
sort  of  substitution,  is  little  more  than  a  well-grounded 
suspicion  that  it  is  going  on.  Fraud  of  this  kind  is 
dangerous,  because  it  reacts  immediately  and  seriously 
an  the  reputation  of  the  genuine  article.  A  man  goes  to 
a  soda  fountain  and  asks  for  a  glass  of  Horlick's  Malted 
Milk.  He  is  served  out  of  a  Horlick's  Malted  Milk  dis- 
pensing bottle  with  a  substitute  which  looks  like  Hor- 

212 


SUBSTITUTION     AND     PASSING     OFF 

lick's  Malted  Milk.  If  he  notices  any  difference  in  the 
taste  he  attributes  it  to  deterioration  in  the  quality  of 
the  genuine  and  instead  of  keeping  away  in  future  from 
that  particular  store,  he  says  to  himself:  "Horlick's 
Malted  Milk  is  not  as  good  as  it  used  to  be,  I  will  try 
something  else  next  time." 

Horlick's  Malted  Milk  is  used  simply  as  an  illustra- 
tion. The  injury  is  the  same  in  the  case  of  any  article 
dispensed  to  the  public  out  of  a  distinctive  package 
where  the  consumer  does  not  get  possession  of  the  pack- 
age. The  results  are  frequently  very  far  reaching. 

The  Sealshipt  Oyster  System  a  number  of  years  ago 
started  on  a  campaign  of  advertising  based  upon  the 
assumption  that  if  the  public  could  get  oysters  without 
adulteration,  floating  or  preservatives,  those  oysters  would 
be  sufficiently  superior  in  quality  to  the  common  kind  to 
create  and  keep  an  enormous  business  for  any  concern 
which  would  be  able  to  deliver  such  oysters  to  the  con- 
sumer. Thereupon  there  was  devised  an  elaborate  sys- 
tem of  inspection,  grading  and  packing,  a  complete  sys- 
tem of  carriers  from  the  producer  through  the  jobber 
to  the  retailer,  so  that  the  retailer  secured  in  original 
sealed  packages  the  best  oysters  without  any  chance  of 
adulteration  or  manipulation.  The  Sealshipt  Company 
apparently  had  taken  every  precaution  at  every  step 
— except  one.  The  retailer  was  furnished  with  complete 
and  elaborate  dispensing  receptacles,  which  were  distinc- 
tive and  which  identified  Sealshipt  oysters,  but  no  means 
were  devised  by  which  the  retailer  was  prevented  from 
selling  any  oysters  he  chose  to  the  public  out  of  the  Seal- 
shipt container,  and  there  was  no  way  for  the  Sealshipt 
Company  to  tell  whether  what  were  sold  as  Sealshipt 
oysters  out  of  the  Sealshipt  container  were  in  fact 
oysters  which  had  been  so  carefully  safeguarded  from 
their  origin  to  the  retailer  or  whether  they  were  an  in- 
ferior product  dumped  into  the  container  at  the  last 
moment  by  the  dealer.  It  was  found  as  a  practical  ques- 
tion that  it  was  impossible  to  catch  the  substituter  unless 
someone  was  on  hand  when  the  substitution  was  actually 

213 


made  and  could  testify  that  with  his  own  eyes  he  saw 
a  dealer  put  into  the  Sealshipt  retail  dispensing  container 
oysters  which  were  not  Sealshipt  oysters,  which  gets  back 
to  the  original  proposition — the  law  is  plain  enough  that 
the  sale  of  a  substituted  product  out  of  a  genuine  con- 
tainer is  unlawful  and  will  be  stopped  when  proof  can  be 
furnished  that  it  is  being  done.  As  a  general  thing  this 
proof  can  be  only  of  three  kinds:  (a)  where  witnesses 
testify  that  they  have  in  fact  seen  the  accused  dealer  fill 
a  genuine  package  with  spurious  goods  and  sell  these 
spurious  goods  from  the  genuine  package;  (b)  where 
it  is  possible  to  detect  the  difference  between  the  genuine 
and  spurious  by  analysis  and  witnesses  can  testify  that 
they  procured  from  the  accused  dealer  the  suspected 
package  and  its  contents,  and  an  analysis  shows  the  con- 
tents spurious;  or  (c)  where  a  portion  dispensed  from 
the  suspected  package  is  preserved  and  analyzed  and  is 
spurious.  No  other  testimony  is  really  worth  much.  Sup- 
pose a  dozen  men  testify  that  they  went  to  a  certain 
saloon  and  asked  for  a  drink  of  "Green  River  Whiskey", 
that  the  bartender  passed  them  glasses  and  a  bottle  bear- 
ing a  "Green  River"  label,  that  they  poured  out  drinks 
and  consumed  them,  and  that  the  whiskey  dispensed  did 
not  taste  like  "Green  River  Whiskey",  and  in  their  opin^ 
ion  was  not  "Green  River  Whiskey".  The  bartender,  the 
proprietor  of  the  saloon  and  all  his  assistants  swear  that 
they  never  sold  out  of  a  "Green  River"  bottle  anything 
but  "Green  River  Whiskey",  and  that  the  particular  bot- 
tle testified  to  by  the  complainant's  witnesses  contained 
"Green  River  Whiskey".  The  result  is  that  the  sense 
of  taste  of  a  number  of  people  is  set  up  against  the  posi- 
tive statements  of  others  and  the  sense  of  taste  is  almost 
always  discomfited. 

Suppose  again  there  is  a  suspicion  that  a  certain  soda 
dispenser  is  substituting  a  spurious  product  when  "Hires' 
Root  Beer"  is  asked  for.  Witnesses  are  produced  by  the 
complainant,  who  testify  that  on  such  and  such  a  day 
they  went  to  defendant's  place,  asked  for  "Hires'  Root 
Beer",  and  were  served  with  something  which,  in  their 

214 


SUBSTITUTION     AND     PASSING     OFF 

opinion,  was  not  "Hires'  Root  Beer".  This  defendant  has 
two  grounds  of  defense  open  to  him,  that  the  witnesses 
are  mistaken  in  their  taste  and  what  was  furnished  was 
"Hires'  Root  Beer",  or  the  dispenser  and  half  a  dozen 
other  witnesses,  who  were  conveniently  at  hand,  testify 
they  remember  the  circumstance  perfectly,  that  the  wit- 
nesses came  in  and  did  not  ask  for  "Hires'  Root  Beer", 
but  asked  for  root  beer  simply. 

DETECTING  FALSE  REPRESENTATION  AND  SUBSTITUTION 

These  illustrations  serve  to  show  the  difficulty  of  proof 
in  cases  of  this  kind.  At  one  of  the  large  expositions 
within  the  last  few  years  it  was  suspected  that  the  con- 
cessionaire for  soft  drinks  about  the  grounds  was  sys- 
tematically substituting  a  spurious  product  for  "Hires' 
Root  Beer".  No  one  had  any  doubt  that  the  substitu- 
ting was  going  on.  The  difficulty  was  of  proving  it. 
There  were  perhaps  twenty  of  the  defendant's  oases  scat- 
tered about  the  exposition  grounds  and  it  was  arranged 
that  at  precisely  the  same  time  three  persons  should  pre- 
sent themselves  at  each  stand  and  ask  distinctly  for 
"Hires'  Root  Beer".  Each  person  had  in  his  pocket  a 
bottle  big  enough  to  hold  the  drink.  Precisely  at  the 
appointed  time  they  all  presented  themselves  at  the  stands 
and  all  distinctly  asked  for  "Hires'  Root  Beer".  The 
drinks  were  served  and  instead  of  drinking  them  each 
person  produced  his  bottle,  placed  it  on  the  counter, 
poured  the  drink  into  it,  sealed  it  up  and  went  away. 
An  analysis  disclosed  that  in  no  case  was  "Hires'  Root 
Beer"  furnished,  and  as  a  result  of  this  team  work  the 
defendant  was  around  the  next  morning  with  a  full  con- 
fession and  abject  apology,  and  promises  of  reform, 
which  were  religiously  carried  out. 

The  refilling  of  genuine  packages  is  really  nothing  but 
the  oral  passing  off  of  one  article  in  response  to  a  request 
for  another.  The  genuine  package  filled  with  spurious 
goods  is  simply  a  little  touch  to  lend  verisimilitude  to  the 
transaction.  It  is  a  representation  that  the  article  con- 

215 


RESTRAINING     UNFAIR     TRADE 

tained  in  the  package  is  the  genuine  stuff.  The  same 
representation  can  be  made  without  the  use  of  the  genuine 
package.  It  was  so  made  in  the  "Hires'  Root  Beer"  case 
above  referred  to,  and  it  is  made  in  many  other  cases  in 
similar  fashion,  sometimes  merely  by  passing  off  without 
any  comment  a  spurious  product  in  response  to  a  request 
for  the  genuine.  This  is  enjoinable.  A  housewife  at  a 
store  who  asks  for  "Gold  Dust"  washing  powder  is  en- 
titled to  get  it,  and  if  the  dealer  passes  out  something 
else  he  has  committed  an  actionable  wrong  for  which 
the  Fairbank  Company  has  redress  in  the  courts.  There 
are  many  cases  involving  this  sort  of  fraud.  Enoch 
Morgan's  Sons  succeeded  in  stopping  a  retail  grocer  from 
selling,  in  response  to  a  request  for  "Sapolio"  an  article 
called  "Pride  of  the  Kitchen".  The  Supreme  Court  itself 
has  passed  upon  this  question  and  sustained  an  injunc- 
tion secured  by  the  proprietor  of  "Hunyadi  Janos  Water" 
against  Siegel  Cooper  Company,  restraining  the  passing 
off,  in  response  to  requests  for  "Hunyadi  Janos",  of  any 
other  water. 

EVIDENCE  MUST  SHOW  PASSING  OFF  TO  BE  INTENTIONAL 

The  problem  in  cases  of  this  kind  is  nothing  but  a 
question  of  proof,  but  the  proof  is  always  difficult. 
Enough  instances  of  passing  off  should  always  be  ob- 
tained to  negative  the  idea  of  casual  blunder  or  honest 
mistake.  It  should  be  shown  to  be  systematic,  habitual 
and  deliberate.  It  is  never  safe  in  my  judgment  to  pro- 
ceed in  these  cases  unless  there  are  at  least  twenty  in- 
stances of  the  passing  off  of  one  article  for  the  other  on 
different  days,  testified  to  by  different  people,  and  where 
possible  the  substitution  should  be  made  in  response  to 
a  written  and  not  an  oral  order,  because  this,  of  course, 
at  once  destroys  the  contention  so  frequently  made  by 
defendants  in  these  cases  that  the  purchaser  did  not 
ask  for  the  complainant's  specific  article,  but  used  some 
general  designation,  which  allowed  the  defendant  to  use 
his  discretion  as  to  what  should  be  furnished.  This  sort 

216 


SUBSTITUTION     AND     PASSING     OFF 

of  fraud  is  a  most  convincing  argument  for  the  necessity 
of  trade-marks  and  their  use  right  through  to  the  ulti- 
mate purchaser.  Where  a  consumer  knows  the  mark 
upon  the  genuine  goods  and  is  able  unmistakably  to 
identify  and  distinguish  them  from  others  of  a  similar 
kind,  passing  off  cannot  be  practiced,  because  the  mark 
is  so  conspicuously  before  the  consumer's  eye  and  so  in- 
delibly impressed  upon  his  mind  that  an  attempt  to  pass 
off  anything  else  in  place  of  the  genuine  article  is  bound 
to  result  in  failure.  It  is  only  in  cases  where  from  the 
nature  of  the  article  dealt  in  or  the  custom  of  the  trade, 
trade-marks  cannot  be  used  or  are  not  used  as  they 
should  be  used;  namely,  to  bridge  the  gap  between  re- 
tailer and  consumer,  that  substitution  and  passing  off  are 
much  indulged  in  or  have  any  likelihood  of  success.  This, 
I  think,  is  demonstrated  by  the  fact  that  this  kind  of 
fraud,  which  is  about  the  most  petty  and  contemptible 
of  any,  is  most  often  practiced  with  respect  to  articles 
which  get  to  the  consumer  in  bulk  and  not  in  packages. 
Soda  fountain  syrups,  ingredients  of  prescriptions  and 
the  like  are  the  ones  which  suffer  most. 

Where  a  consumer  is  sufficiently  interested  by  adver- 
tisements or  otherwise  to  want  any  particular  brand  of 
goods  and  ask  for  it,  he  should  in  all  fairness  be  fur- 
nished by  the  manufacturer  of  those  goods,  with  means 
which  enable  him  to  be  certain  that  the  product  offered 
to  him  is  the  thing  that  he  wants  and  not  something 
else,  the  sale  of  which  enables  an  unscrupulous  dealer  to 
make  a  few  cents  more  profit. 


217 


CHAPTER  XXII 

PROTECTING  GOOD  WILL  FROM 
UNFAIR  ADVERTISING 


DECEPTIVE  advertising  has  received  a  great  deal  of 
attention  from  the  courts.  A  complainant's  adver- 
tisements are  always  scrutinized  where  the  defense  is 
raised  that  he  does  not  come  into  court  with  clean  hands, 
and  it  is  the  law  that  material  and  substantial  false 
statements  concerning  a  business  or  a  product  for  which 
the  protection  of  a  court  of  equity  is  sought,  disentitle 
to  relief.  Unfair  trading  by  means  of  deceptive  adver- 
tising involves  a  consideration  of  the  advertisements  not 
so  much  of  the  complainant  as  those  of  the  unfair 
trader. 

It  is  perfectly  evident  that  the  business  of  one  firm  or 
establishment  may  be  appropriated  and  diverted  to  an- 
other by  means  of  false  advertising.  The  matter,  how- 
ever, is  usually  so  mixed  with  other  things  that  it  is 
difficult  to  pick  out  cases  where  the  unfairness  was  lim- 
ited to  advertising.  Deceptive  advertising  is  usually  only 
one  element  of  a  deceptive  scheme.  A  rough  classifica- 
tion of  misleading  advertisements  may  perhaps  be  tried, 
and  therefore  first  there  will  be  discussed  advertise- 
ments which  are  unfair  and  deceptive  in  themselves  with- 
out reference  to  concurrent  deception  of  other  kinds  or 
additional  fraudulent  acts. 

The  consideration  of  cases  of  mere  unfair  advertising 
is,  as  a  general  thing,  a  little  involved  because  the 
injury  resulting  from  an  advertisement  is  not  always 
apparent.  This  is  illustrated  in  a  case  brought  by 

218 


ADVERTISING     ATTACKS     ON     GOOD     WILL 

Price's  Patent  Candle  Company,  who  are  makers  of  soap. 
Their  soap  had  a  picture  of  a  ship  on  the  wrapper  and 
was  known  as  "Ship  Mark  Soap".  Jeyes'  Sanitary  Com- 
pounds Company,  rival  soap  makers,  began  the  use  of 
a  poster,  showing,  among  other  things,  the  picture  of  a 
ship  and  bearing  the  words  "The  Only  Royal  Warrants 
for  Disinfectants,  Jeyes'  Fluid,  Powder,  Soaps".  Price 
brought  suit  to  restrain  the  use  of  a  ship  picture  on  de- 
fendant's advertising  posters.  It  was  contended  by  de- 
fendant's counsel  that  no  injury  could  possibly  result  to 
the  complainant  on  account  of  his  client's  advertising  the 
picture  of  a  ship  in  connection  with  soap,  that  if  the 
complainant's  soap  was  known  as  "Ship  Mark  Soap", 
the  more  the  defendant  advertised  the  picture  of  a  ship 
the  more  the  complainant  was  benefited,  because  it  was 
an  advertisement  of  their  soap  and  could  not  conceiv- 
ably hurt  them  any.  Complainant's  argument  was: 
"Our  soap  is  known  as  'Ship  Mark  Soap'.  'Ship  Mark 
Soap'  means  Price's  soap.  Defendants  advertise  soap 
with  the  picture  of  a  ship  in  connection  with  the  name 
Jeyes.  This  is  a  representation  that  'Ship  Mark  Soap' 
is  Jeyes'  soap,  and  enables  defendants  to  divert  to  them- 
selves the  good  reputation  of  'Ship  Mark  Soap'." 

The  Court  seemed  to  take  kindly  to  this  view,  inter- 
rupting defendant's  counsel's  argument  by  saying: 

"You  may  have  an  answer  behind,  but  you  have  not 
answered  it.  At  present  you  have  only  answered  it  by 
saying  that  as  Jeyes  is  written  upon  it  he  must  know 
that  he  is  buying  Jeyes'  soap.  That  really  does  not  meet 
the  difficulty  in  the  least  degree.  I  want  you  to  meet 
the  difficulty.  You  are  saying  it  is  quite  impossible  that 
any  person  endowed  with  sense  could  be  deceived,  and 
that  he  could  not  be  deceived  because  he  could  not  mis- 
take the  one  poster  for  the  other,  but  it  is  put  to  you 
that  he  may  be  deceived  in  this  way,  that  he  may  wish 
to  buy  'Ship  Mark  Soap';  he  may  not  know  what  the 
name  of  the  manufacturer  is  of  'Ship  Mark  Soap',  but  he 
knows  the  soap  is  a  very  good  soap  and  has  a  good  name 
in  the  market.  He  may  by  those  false  posters  be  induced 

219 


RESTRAINING     UNFAIR     TRADE 

to  buy  Jeyes'  soap,  and  if  he  does  he  will  not  get  what 
he  meant  to.  What  he  meant  was  Price's  soap,  and 
although  he  did  not  know  the  name  of  Price,  he  meant 
that  soap  of  Price's  which  he  knows  under  the  name  of 
'Ship  Mark  Soap'." 

In  the  celebrated  case  about  Hoffman  House  Cigars 
the  complainant  used  the  familiar  advertisement  of  the 
picture  of  a  banquet  scene,  where  prominent  men  of 
various  political  faiths  were  assembled  about  the  board. 
A  box  of  Hoffman  House  cigars  was  shown  being  served 
to  them.  The  idea  intended  to  be  conveyed  by  this  pic- 
ture was  that  the  Hoffman  House  cigar  was  a  favorite 
upon  such  occasions  and  smoked  by  the  most  eminent 
statesmen  and  orators  of  the  land.  The  inference,  of 
course,  was  that  no  matter  how  much  they  might  differ 
on  political  questions,  they  agreed  upon  the  proper  cigar 
to  smoke  when  the  rivalries  of  politics  were  laid  aside  and 
they  met  upon  common  ground. 

This  picture  the  defendant  boldly  appropriated  as  an 
advertisement  for  his  "Banquet  Hall  Cigar".  The  ar- 
rangement of  the  group  was  somewhat  changed,  but  the 
same  distinguished  assembly  was  shown,  they  were  drink- 
ing the  same  wine,  and  listening  to  the  same  orator. 

It  was  held  that  this  was  unfair  competition.  The 
Court  observed: 

Where  the  goods  of  a  manufacturer  have  become  popular,  not  only 
because  of  their  intrinsic  worth,  but  also  by  reason  of  the  in- 
genious, attractive  and  persistent  manner  in  which  they  have  been 
advertised,  the  good  will  thus  created  is  entitled  to  protection.  The 
money  invested  in  advertising  is  as  much  a  part  of  the  business  as 
that  invested  in  buildings  or  machinery,  and  a  rival  in  business  has 
no  more  right  to  use  the  one  than  the  other,  no  more  right  to  use 
the  machinery  by  which  the  goods  are  placed  upon  the  market  than 
the  machinery  which  originally  created  them.  No  one  should  be 
permitted  to  step  in  at  the  eleventh  hour  and  appropriate  ad- 
vantages resulting  from  years  of  toil  on  the  part  of  another. 

Of  course,  it  is  an  appropriation  of  a  man's  brains 
to  steal  his  original  and  distinctive  advertising,  but  the 
injury  resulting  from  it  is  an  inferential  one.  The  legal 
theory  on  which  the  courts  seem  to  base  relief  is  that 

220 


Evidence  showed  that  when  a  purchaser,  attracted  by  this  advertising,  asked  for 

a  "Big  Ben"  clock,  lie  was  offered  another  and  a  cheaper  clock.     No  explanation 

whatever  was  made.    An  injunction  broke  up  the  scheme 


ADVERTISING  ATTACKS  ON  GOOD  WILL 

where  A  advertises  his  goods  in  distinctive  and  original 
fashion  to  such  an  extent  that  his  advertising  has  become 
characteristic  of  his  products,  B  will  not  be  permitted  to 
use  advertisements  which  will  inferentially  represent  that 
B's  goods  are  the  goods  which  the  public  has  become 
habituated  to  associate  with  the  distinctive  advertising  of 
A.  To  put  it  concretely,  A  makes  "Star  Brand  Soap", 
which  has  a  reputation.  B  will  not  be  permitted  in  his  ad- 
vertisements to  do  anything  which  will  convey  the  im- 
pression that  he  and  not  A  makes  "Star  Brand  Soap". 
Such  cases  as  these  are  not  common. 

UNFAIR  ADVERTISING  IS  USUALLY  PART  OF  A  PLAN 
OF  INFRINGEMENT 

The  more  common  sort  of  advertising  fraud  is  the  kind 
which  is  a  link  in  a  general  chain  of  unfair  trading, 
where  the  advertising  itself  may  be  honest  enough,  but 
where  it  is  used  simply  as  a  decoy  to  inveigle  the  observer 
into  patronizing  a  certain  individual  in  the  belief  that  he 
is  dealing  with  another,  or  buying  a  certain  article  and 
having  sold  to  him  a  different  one.  Some  of  the  Baker 
cases  illustrate  this  point. 

Slack,  a  Chicago  grocer,  for  years  advertised  in  the 
daily  papers  "Baker's  Chocolate"  and  "Baker's  Cocoa". 
In  response  to  requests  for  "Baker's  Cocoa"  or  "Baker's 
Chocolate",  Walter  Baker's  goods  were  sold.  This,  of 
course,  was  honest  advertising  and  fair  trading.  Slack's 
business  prospered,  and  he  continued  the  advertising  of 
"Baker's  Chocolate"  and  "Baker's  Cocoa",  but  he  after- 
wards sold  without  explanation,  in  response  to  requests 
for  the  product  under  that  name,  cocoa  and  chocolate 
which  were  not  made  by  Walter  Baker  &  Company.  The 
same  advertising  by  this  consequence  became  fraudulent. 
The  Court  expressed  its  views  in  this  language: 

This  was  seeking  to  use  the  reputation  and  good  will  of  com- 
plainant in  the  sale  of  the  spurious  product  and  was  an  efficient 
means  to  that  end.  This  was  as  much  a  fraud  as  an  actual  oral 
misrepresentation  to  a  proposing  purchaser. 

223 


RESTRAINING     UNFAIR     TRADE 

As  a  graphic  illustration  of  this  method  of  unfair 
trading,  which  is  really  nothing  but  a  clumsy  device, 
on  page  221  is  reproduced  a  photograph  of  the  dis- 
play window  of  a  Pittsburg  jeweler.  The  announcement 
"Big  Ben  $1.65"  (without  at  this  time  considering  the 
question  of  price  cutting  involved)  was  a  perfectly  honest 
announcement,  provided  that  when  the  purchaser,  at- 
tracted by  this  advertising,  asked  for  a  "Big  Ben"  clock 
he  got  it,  but  when  it  was  shown  that,  in  response  to  a 
request  for  a  "Big  Ben"  clock,  another  and  different  clock 
was  furnished  without  explanation,  an  injunction  was 
granted  against  the  continuing  of  the  advertisement 
unless,  in  response  to  requests  for  "Big  Ben"  clocks  the 
genuine  clock  was  supplied.  The  ingenious  manner  in 
which  the  window  was  baited  up  for  the  unwary  by  a 
few  "Big  Ben"  clocks  indicated  that  this  particular  de- 
fendant was  more  or  less  of  an  artist. 

Some  courts,  notably  those  in  England,  have  held  that 
such  signs  are  deceptive  and  unfair,  even  where  the  pur- 
chaser is  informed  that  while  the  genuine  article  is  being 
advertised  on  the  outside  of  the  store,  it  is  not  on  sale 
in  the  inside — that  it  is  unfair  to  use  another's  reputa- 
tion as  a  decoy. 

In  a  proceeding  brought  by  the  Singer  Company,  the 
defendant  advertised  "Singer  Machines",  but  explained 
both  to  callers  and  correspondents  that  the  machines 
were  not  "Singers"  and  the  machines  sold  were  not  so 
marked.  The  Court  said: 

Then  I  am  asked  to  hold  that  because  when  the  applicant  in 
answer  to  the  advertisement  sends  for  particulars  and  those  par- 
ticulars do  not  deceive  him,  and  cannot  deceive  him,  that  therefore 
there  is  no  deceit  at  all.  Now,  I  take  an  entirely  different  view.  I 
think  this  is  a  clever  device  on  the  part  of  fraudulent  traders  having 
entrapped  their  victim,  having  got  the  man  to  answer  their  adver- 
tisement, under  the  notion  that  he  is  going  to  purchase  a  "Singer" 
machine,  then  they  cover  themselves  with  a  lot  of  documents  which 
refer  to  the  "Empira"  and  hope  that  the  "Singer"  part  of  it  will 
be  forgotten  and  that  he  will  order  an  "Empira"  and  never  consider 
the  "Singer".  I  believe  it  is  all  part  of  a  deliberate  plan,  and  I 
have  not  the  slightest  doubt  myself,  that  not  only  is  there  deceit, 

224 


ADVERTISING  ATTACKS  ON  GOOD   WILL 

but  intended  deceit,  and  as  such  the  court  ought  to  deal  with  it  as 
severely  as  it  can. 

During  the  production  in  Chicago  of  the  dramatiza- 
tion of  Gen.  Wallace's  "Ben  Hur",  an  enterprising  pur- 
veyor of  polite  vaudeville  and  tip-top  minstrelsy  a  block 


Uf|TC Pending    decision    of    Hon     Judge    Kohl- 

"U  1 1  8aftt  of  United  States  Court,  the  opening 
Date  of  "BUN-HER  "  the  Great  Big  Funny  Bur- 
lesque on 

"BEN-HUR" 

Has  Been  Temporarily  Postponed 


away  from  the  Illinois  Theatre,  where  the  genuine  per- 
formance was  being  given,  announced  at  his  theatre, 
"Soon  the  funny  burlesque  Ben  Hur".  The  producers 
of  the  genuine  work,  which  was  a  serious  and  reverent 

PLEVELAND'O 

U  THEATRE  0 

TWICE   DAILY 
INJUNCTIONIZED 

HER  BUN 


BEN  HUR 

thing,  at  once  objected  to  this,  to  which  the  defendant 
paid  no  attention;  and  then  filed  a  bill  in  the  Federal 
Court  and  obtained  an  injunction  restraining  defendant 
from  using  the  name  "Ben  Hur".  Literally  obeying  the 


225 


RESTRAINING     UNFAIR     TRADE 

letter  of  the  injunction,  but  fracturing  its  spirit,  de- 
fendant put  the  announcement  in  the  newspapers  shown 
above  on  page  225. 

The  name  "Bun  Her"  was  thereupon  enjoined,  and 
then  the  town  was  placarded  with  posters  like  the  lower 
one  shown  on  page  225. 

This  last  poster  was  hung  in  windows  about  the  city. 
Another,  shown  below,  was  posted  on  billboards. 

This  bill  contained  as  its  most  conspicuous  feature  the 
name  "Ben  Hur"  and  was  in  its  general  appearance  and 
effect  misleading  and  deceptive.  In  fact,  as  an  exhibi- 
tion of  the  number  and  variety  of  the  falsehoods  that 

CLEVELAND'S 

THEATRE 

3C   T 


BECAUSE  Or  THE  FACT  THAT 

KLAW  &  CRLAINGER 

TBE  FOUNTAIN  HEAD  OF  THE  ALL  POWERFUL 

THEATRICAL  TRUST 

BAVE  SECURED  THROUGH  THE 

UNITED  STATES   COURT 

-  AN  - 

INJUNCTION 

RESTRAINING  ME  FROM  PRODUCING  Four 
"BUN   HER"  MY  BURLESQUE  ON 

BEN  HUR 

THE  FOLLOWING  ACTS  HAVE  BEEN  ENGAGED  AND 

HILL  POSITIVELY  APPEAR 

can  be  expressed  by  the  use  of  display  letters  this  second 
bill  was  unique.  Reading  the  words  in  large  capitals  the 
announcement  is  that  shown  on  page  227. 

The  impression  created  on  an  ordinary  reader  by  this 
speciment  of  typographical  mendacity  would  be  that  in 
spite  of  the  injunction  "Ben  Hur"  would  positively  ap- 

226 


ADVERTISING     ATTACKS     ON     GOOD      WILL 

pear  at  Cleveland's  Theatre.     It  was  not  till  repeated 
applications  were  made  to  the  court  that  a  sufficient  re- 

CLEVELAND'S 

THEATRE: 

T   E.   A.    ! 


KLAW  &  ERLAftGER 
THEATRICAL  TRUST 

UNITED  STATES   COURT 

INJUNCTION 

BEN  HUR 

WILL  POSITIVELY  APPEAR 

straint  was  imposed,  because  no  one  not  a  clairvoyant 
could  foresee  what  new  scheme  the  defendant's  ingenuity 
would  hatch. 


227 


CHAPTER  XXIII 

PROTECTING   BUSINESS 
NAMES 


THE  COURTS  protect  from  the  deceptive  assaults  of 
unfair  competitors  business  good  will,  however  sym- 
bolized. When  the  subject  matter  is  merchandise,  the 
good  will  attaches  to  the  means  by  which  one  producer's 
commodity  is  distinguished  from  others.  It  is  obvious 
that  a  business  not  a  producer  of  merchandise  which 
passes  from  hand  to  hand,  may  also  have  a  good  will. 
A  particular  store,  hotel,  bank,  office  building,  theatre, 
lawyer,  physician,  or  even  a  church  may  be  preferred  to 
another  of  equal  merit,  and  thus  the  continued  patron- 
age of  the  same  people  be  probable. 

One  corporation  as  a  business  institution,  independ- 
ently of  the  goods  it  makes,  may  be  liked  by  the  public 
better  than  another,  and  thus,  irrespective  of  the  iden- 
tification of  its  merchandise  by  trade-mark  or  otherwise, 
may  have  the  good  will  of  the  community.  Illustrations 
of  these  things  readily  suggest  themselves.  Many  a  cor- 
poration has  a  reputation  for  fair  dealing  and  integrity 
among  people  who  know  nothing  about  the  goods  it  may 
produce.  Many  banks  may  have  a  reputation  for  sound- 
ness and  stability  among  people  who  never  have  been 
inside  their  doors.  Many  hotels,  restaurants  and  thea- 
tres, lawyers  and  doctors  are  well  known  to  people  in  dis- 
tant places,  who  never  have  patronized  them.  The  fact 
of  knowledge  alone  is  of  value  because  it  is  potential 
patronage,  and  the  actual  friendliness  of  people  who  come 
in  contact  in  a  business  way  with  any  of  the  individuals 

228 


PROTECTING     BUSINESS     NAMES 

or  institutions  named  is  an  actual  asset  of  great  value. 

This  friendliness  can  result  in  benefit  to  the  person  or 
concern  toward  which  it  is  directed  only  when  definite 
recognition  is  possible.  Good  will  must  be  focused  upon 
something — it  must  be  more  than  a  general  uncrystallized 
feeling  of  friendliness.  There  must  be  something1  to  which 
it  can  attach  to  be  of  any  value  to  anyone.  To  patronize 
a  store  or  hotel  a  second  time,  or  to  patronize  it  the 
first  time,  if  the  patronage  is  anything  but  an  accident, 
it  must  be  identified.  Whatever  it  is  that  fixes  identity 
and  thus  makes  certain  to  the  potential  patron  that 
his  friendliness  or  good  will  toward  it  is  not  being  di- 
verted from  the  intended  recipient  to  another,  is  the  em- 
bodiment of  the  store  or  hotel  proprietor's  expectation 
of  the  public's  continued  patronage  and  the  benefits  re- 
sulting to  him  from  it.  The  means  of  identification  of 
business  establishments  are  the  things  to  which  good  will 
attaches  and  which  make  it  a  continuing  asset.  It  may 
be  the  name  of  the  proprietor,  the  sign  over  the  door,  a 
device  on  the  wrapping  paper,  a  peculiarly  designed  store 
front,  a  partnership  style,  a  corporate  name  or  a  nick- 
name. It  is  of  no  consequence  what  it  may  be  in  any 
particular  case;  if  it  is  a  means  of  identification  it  may 
not  be  used  or  imitated  by  competitors  so  as  to  impair 
the  value  to  the  true  owner  of  the  good  will  and  patron- 
age which  its  use  secures  to  him.  The  principles  of  com- 
mercial morality  enforced  by  the  courts  in  cases  of  this 
kind  are  quite  as  rigid  as  those  applied  in  cases  of  trade- 
mark infringements  or  other  manifestations  of  unfair 
trading. 

The  following  instances  are  cited,  not  as  an  exhaustive 
collection  by  any  means,  but  as  illustrations  merely  of 
the  application  of  the  law  against  unfair  competition  to 
many  divergent  conditions,  and  the  effective  methods  of 
the  modern  law  in  dealing  with  the  business  parasite. 

In  1851  in  New  York  arose  a  case  out  of  the  attempted 
piracy  of  the  name  of  the  old  "Irving  House",  which  had 
been  opened  in  the  fall  of  1848.  The  defendants  opened 
a  hotel  which  they  called  the  "Irving  Hotel"  and  an 

229 


RESTRAINING     UNFAIR     TRADE 

injunction  was  sought  to  restrain  the  use  of  this  name. 
It  was  contended  by  the  defendants  that  there  was  no 
sign  on  the  front  of  plaintiff's  hotel  to  indicate  that  it 
was  the  Irving  House  and  consequently  if  anybody  had 
a  right  to  the  name  it  was  the  defendants,  because  they 
had  first  placed  a  sign  containing  the  name  "Irving"  on 
their  hotel.  The  Court  paid  little  attention  to  this 
argument.  They  said: 

If  we  were  permitted  to  speak  from  our  own  knowledge,  we  should 
say  that  the  fact  of  such  name  being  applied  by  the  plaintiff  to  his 
hotel  was,  at  the  time  the  defendants  applied  the  same  name  to 
their  hotel,  and  is  now,  notorious.  There  would  be  no  more 
necessity  for  the  plaintiff  to  place  in  large  letters  upon  the  front 
of  his  building,  "This  is  the  Irving  House,"  in  order  to  designate 
it  and  secure  an  appropriation  of  the  name,  than  there  would  be 
to  write  on  the  public  edifices  of  the  city,  "This  is  the  City  Hall," 
and,  "This  is  Trinity  Church". 

We  think  that  the  principle  of  the  rule  is  the  same,  to  whatever 
subject  it  may  be  applied,  and  that  a  party  will  be  protected  in 
the  use  of  a  name  which  he  has  appropriated  and  by  his  skill  ren- 
dered valuable,  whether  the  same  is  upon  articles  of  personal  property 
which  he  may  manufacture,  or  applied  to  a  hotel  where  he  has  built 
up  a  prosperous  business. 

We  are  not  disposed  to  interfere  with  the  lawful  pursuits  of  any 
one.  Every  man  may  and  ought  to  be  permitted  to  pursue  a  lawful 
calling  in  his  own  way,  provided  he  does  not  encroach  upon  the 
rights  of  his  neighbor  or  the  public  good.  But  he  must  not,  by 
any  deceitful  or  other  practice,  impose  upon  the  public;  and  he  must 
not,  by  dressing  himself  in  another  man's  garments,  and  by  as- 
suming another  man's  name,  endeavor  to  deprive  that  man  of  his 
own  individuality,  and  thus  despoil  him  of  the  gains  to  which  by 
his  industry  and  skill  he  is  fairly  entitled.  To  make  the  application: 
If  one  man  has,  by  close  attention  to  the  comfort  of  his  guests,  and 
by  superior  energy,  made  his  hotel  desirable  for  the  traveler,  and 
caused  its  name  to  become  popular  throughout  the  land,  another 
man  ought  not  to  be  permitted  to  assume  the  same  name  in  the  same 
town,  and  thus  deprive  him  who  first  appropriated  the  name  of  some 
portion  of  the  fruits  of  that  good  will  which  honestly  belong  to 
him  alone. 

During  the  same  year,  the  proprietors  of  the  old 
Revere  House  in  Boston  got  into  a  lawsuit  concerning 
the  name  of  that  establishment.  A  man  named  Marsh 
agreed  with  Paran  Stevens  that  he  would  keep  good  car- 
riages, horses  and  drivers  on  the  arrival  of  certain  trains 

230 


PROTECTING     BUSINESS     NAMES 

on  the  Boston  and  Worcester  Railroad,  to  convey  pas- 
sengers to  the  Revere  House.  Stevens  agreed  to  employ 
Marsh  for  this  purpose  and  authorized  him  to  put  on  his 
coaches  and  the  caps  of  his  drivers  the  words  "Revere 
House".  A  man  named  Billings,  who  had  previously  had 
the  contract,  continued  to  use  the  words  "Revere,  House" 
as  a  badge  on  his  coaches  and  on  his  drivers'  caps.  When 
trains  arrived  at  the  station  Billings'  drivers  called 
"Revere  House"  and  diverted  passengers  from  Marsh's 
coaches  to  Billings'.  Marsh  thereupon  sued.  The  Court, 
in  delivering  his  opinion,  observed: 

The  ground  of  action  against  the  defendants  is  not  that  they 
carried  passengers  to  the  Revere  House,  or  that  they  had  the 
words  "Revere  House"  on  the  coaches  and  on  the  caps  of  the 
drivers  merely,  but  that  they  falsely  and  fraudulently  held  them- 
selves out  as  being  in  the  employment,  or  as  having  the  patronage 
and  confidence  of  the  lessee  of  the  Revere  House,  in  violation  of 
the  rights  of  the  plaintiffs.  The  jury  would  have  been  well  war- 
ranted by  the  evidence  in  finding  that  the  defendants  used  the 
words  "Revere  House"  not  for  the  purpose  of  indicating  merely 
that  they  carried  passengers  to  that  house,  but  for  the  purpose  of 
indicating  and  in  a  manner  and  under  circumstances  calculated  and 
designed  to  indicate,  that  they  had,  and  to  hold  themselves  out  as 
having,  the  patronage  of  that  establishment. 

The  facts  and  the  decisions  in  these  two  cases  are 
referred  to  at  some  length  for  the  purpose  of  showing 
that  as  early  as  1851  the  courts  had  gone  far  in  pro- 
tecting reputable  business  men  in  the  good  will  which  they 
had  created. 

Many  similar  instances  may  be  found  scattered 
through  law  reports. 

A  man  in  New  York  started  a  store  for  the  sale  of 
antiques  and  curiosities,  which  he  called  "The  Little 
Shop".  A  neighbor  started  a  "Little  Antique  Shop". 
He  was  enjoined. 

A  tailoring  concern,  calling  themselves  "The  Six  Lit- 
tle Tailors"  succeeded  in  enjoining  a  competitor  from 
using  the  name  "Six  Big  Tailors". 

An  amusing  case  arose  in  Texas.  Plaintiff  opened  a 
general  variety  and  notion  store  at  Bowie,  which  he 
called  the  "Nickle  Store".  The  defendant  afterwards 

231 


RESTRAINING     UNFAIR     TRADE 

opened  a  similar  store  in  the  same  town  under  the  same 
name,  and  contended  that  he  had  a  right  to  do  so  because 
"Nickle"  was  descriptive  and  conveyed  the  idea  that  it 
was  a  cheap  store.  The  Court  called  attention  to  the 
fact  that  the  word  representing  a  five-cent  coin  is 
spelled  "nickel",  while  the  one  on  the  plaintiff's  sign  was 
spelled  "nickle".  The  Court  consulted  the  dictionary  and 
found  that  "nickle"  is  the  name  of  the  European  green 
woodpecker  and  disposed  of  the  defendant's  contention 
that  the  name  was  descriptive  as  follows : 

It  is  not  contended  that  appellant  dealt  in  woodpeckers  *  *  * 
and  hence  the  name  is  not  descriptive  of  his  merchandise.  Nor  is  it 
insisted  that  it  is  descriptive  of  his  manner  of  doing  business,  unless, 
perhaps,  it  was  intended  to  suggest  that  "the  early  bird  gets 
the  worm".  *  *  *  The  citizens  of  Montague  and  adjoining 
counties,  who  were  not  so  deeply  versed  in  orthography  and  natural 
history,  supposed  that  it  meant  that  a  customer  could  there  buy 
for  a  nickel  all  that  he  could  carry.  Mr.  Cleaver,  seeing  the  con- 
tinuous stream  of  customers  which  was  attracted  to  appellant  by 
this  magic  trade  name  and  door  sign,  began  to  consider  how  he 
might  disturb  that  stream,  and  divert  a  portion  of  its  current  into 
his  estuary,  and  thereupon  set  up  a  similar  sign  over  his  place  of 
business,  and  thus  said  unto  the  natives :  "Lo !  Here  is  'The  Nickel 
Store'  you  have  seen  advertised.  Come  hither  and  trade."  We  are  of 
opinion  that,  according  to  the  definition  given  by  Mr.  Webster, 
the  name  and  sign  was  unique,  and  the  appellant  had  obtained  a 
property  right  therein  at  Bowie,  Tex.,  and  that  appellee  had  no 
right  to  use  the  same  or  any  similar  word  on  his  door  sign  or  other- 
wise in  a  manner  calculated  to  injure  the  appellant,  by  causing 
his  customers  to  deal  with  appellee,  believing  they  were  dealing  with 
appellant. 

Weinstock,  Lubin  &  Co.  conducted  a  dry  goods  and 
clothing  store  in  Sacramento,  which  they  called  the  "Me- 
chanics' Store".  The  architecture  of  the  building  was 
peculiar  and  distinctive,  and  different  from  anything  in 
the  town.  By  strict  attention  to  business,  Weinstock, 
Lubin  &  Co.  had  built  up  a  valuable  reputation  for  fair 
dealing.  The  defendant  set  up  a  store  next  door  to  the 
plaintiff's  and  erected  a  building,  which,  so  far  as  the 
lower  story  was  concerned,  was  similar  in  appearance  in 
every  respect  to  the  store  of  plaintiff's,  and  placed  a 
sign  upon  it  "Mechanical  Store".  There  was  no  diffi- 
culty, as  far  as  the  name  was  concerned. 

232 


PROTECTING     BUSINESS     NAMES 

"That  the  words,  'Mechanics'  Store,' "  said  the  court,  "may  be  made 
a  trade  name,  and  the  user  thereof  become  entitled  under  the  law 
to  protection  from  pirates  preying  upon  the  sea  of  commercial 
trade,  we  have  no  doubt.  We  think  the  defendant  should  be  re- 
strained from  the  use  of  the  words  'Mechanical  Store'." 

The  imitated  architecture  of  the  defendant's  building 
presented  a  much  more  difficult  problem,  and  the  Court 
looked  in  vain  through  the  books  for  any  precedent  to 
justify  the  relief  which  it  felt  must  be  given. 

"By  device,"  said  Judge  Garroute,  "defendant  is  defrauding  plain- 
tiff of  its  business.  He  is  stealing  its  good  will — a  most  valuable 
property — only  secured  after  years  of  honest  dealing  and  large 
expenditures  of  money;  and  equity  would  be  impotent  indeed,  if  it 
could  contrive  no  remedy  for  such  a  wrong.  *  *  *  The  fact  that 
the  question  comes  to  us  in  an  entirely  new  guise,  and  that  the 
schemer  has  concocted  a  kind  of  deception  heretofore  unheard  of 
in  legal  jurisprudence,  is  no  reason  why  equity  is  either  unable 
or  unwilling  to  deal  with  him." 

An  injunction  was  ordered  requiring  the  defendant, 
in  the  conduct  of  his  business,  to  distinguish  his  place  of 
business  from  that  in  which  the  plaintiff  carried  on  its 
business,  in  some  mode  which  would  be  a  sufficient  indi- 
cation to  the  public  that  it  is  a  different  place  of  business 
from  that  of  plaintiff. 

The  New  York  courts  have  also  had  occasion  to  deal 
with  imitated  store  architecture,  and  came  to  a  similar 
conclusion. 

The  imitation  of  corporate  and  partnership  names 
has  been  productive  of  much  litigation.  The  Standard 
Distilling  Company  enjoined  the  Standard  Distilling  and 
Distributing  Company.  The  Philadelphia  Trust  Safety 
Deposit  &  Insurance  Company  enjoined  the  Philadelphia 
Trust  Company.  The  International  Committee  of  Young 
Women's  Christian  Association  stopped  the  Young 
Women's  Christian  Association.  The  Elgin  National 
Watch  Company  enjoined  the  use  of  the  name  Elgin 
Jewelry  Company.  The  following  have  been  held  to  in- 
fringe : 

Holmes,  Booth  &  Haydens — Holmes,  Booth  &  Atwood;  Merchants' 
Detective  Association — Detective  Mercantile  Agency;  Manufacturers' 
Outlet  Company — Taunton  Outlet  Company;  The  New  York  Dental 

233 


RESTRAINING     UNFAIR     TRADE 

Rooms — The  Newark  Dental  Rooms;  Boston  Peanut  Roasting  Com- 
pany— Boston-Trade  Peanut  Roasting  Company;  Allegretti  Chocolate 
Cream  Company — Allegretti  &  Company;  United  States  Dental  Asso- 
ciation— United  States  Dental  Rooms. 

The  United  States  Light  &  Heating  Co.  of  Maine— The  United 
States  Light  &  Heating  Co.  of  New  York;  Celluloid  Mfg.  Co.— Cel- 
lonite  Mfg.  Co.;  Northwestern  Knitting  Co. — Northwestern  Knitting 
Mill;  Lamb  Knit  Goods  Co. — Lamb  Glove  &  Mitten  Co.;  Penberthy 
Injector  Co. — Lee-Penberthy  Mfg.  Co.;  Charles  S.  Higgins  Co. — 
Higgins  Soap  Co.;  Universal  Life  Assurance  Society — Universe  Life 
Association;  William  Rogers  Mfg.  Co. — Rogers  &  Spurr  Mfg.  Co.; 
National  Folding  Box  &  Paper  Co. — National  Folding  Box  Co.; 
Health  Food  Co. — Sanitarium  Health  Food  Co.;  Chicago  Landlords' 
Protective  Bureau — Landlords'  Protective  Department;  Rogers 
Bros. — Rodgers  Bros.  Cutlery  Co.;  Roy  Watch  Case  Company — 
Cainin  Roy  Watch  Co. 

There  are  an  enormous  number  of  cases  scattered 
through  the  law  books  involving  the  deceptive  use  or 
imitation  of  corporate  or  business  names  or  styles  by  com- 
petitors, and  the  rule  applied  is  the  same  which  the  courts 
apply  in  connection  with  trade-mark  infringement.  If 
the  use  by  the  defendant  of  the  name  complained  of  is 
calculated  to  induce  persons  to  deal  with  him  in  the 
belief  that  they  are  dealing  with  the  older  institution, 
unfair  competition  exists  and  relief  is  afforded. 

LOCATION  HAS  LITTLE  BEARING  ON  DECEPTION 

The  mere  fact  that  the  institutions  may  be  in  different 
cities  is  not  conclusive  on  the  question  of  deception.  Best 
&  Co.,  of  New  York,  the  proprietors  of  the  "Lilliputian 
Bazaar",  were  successful  in  enjoining  A.  S.  Best  &  Co.,  of 
Chicago,  who  described  themselves  as  "Lilliputian  Outfit- 
ters", from  the  use  of  the  name  "A.  S.  Best  &  Co."  and 
the  word  "Lilliputian",  it  being  shown  that  confusion  was 
not  only  probable,  but  that  it  had  in  fact  occurred. 
The  National  Cloak  &  Suit  Company  of  New  York  en- 
joined two  Chicago  dealers  in  cloaks  from  using  the  name 
National  Cloak  Company. 

Hotel  and  theatre  names  are  protected  on  the  same 
principle  and  to  the  same  extent,. 

Difficulty  is  occasionally  experienced  in  regard  to  hotel 

234 


PROTECTING     BUSINESS     NAMES 

and  theatre  names,  which  is  directly  traceable  to  the 
perplexity  involved  in  telling  where  the  good  will  which 
is  symbolized  by  the  name  resides.  For  example,  a  man 
for  many  years  has  been  the  lessee  of  a  theatre  or  the 
proprietor  of  a  hotel.  He  calls  it  The  Captains  Hotel 
or  Ford's  Theatre.  The  lease  expires  or  he  gets  into  a 
controversy  with  his  landlord  and  moving,  takes  another 
theatre  or  another  hotel  to  which  he  applies  the  name 
he  made  valuable  in  connection  with  the  old  premises. 
The  landlord  then  leases  the  old  theatre  or  hotel  build- 
ing to  another  manager,  who  continues  to  describe  it  as 
the  Captains  Hotel  or  Ford's  Theatre,  and  the  courts 
are  called  upon  to  decide  which  of  the  two  is  entitled 
to  use  it — whether  the  name  indicates  a  person  or  de- 
scribes a  building.  The  cases  are  irreconcilable,  but 
the  rule  ought  to  be  that  where  the  good  will  is  essen- 
tially personal,  is  created  by  the  individual  and  is  depend- 
ent upon  his  efforts,  it  belongs  to  and  follows  him  regard- 
less of  locality;  but  where  it  is  impersonal  and  identifies 
the  place  it  attaches  to  it  and  remains  with  the  premises  by 
whomever  they  may  be  operated.  The  question  to  be  de- 
termined is  always  whether,  as  was  stated  by  Vice  Chancel- 
lor Pitney  in  a  recent  New  Jersey  case,  the  name  is  given 
to  the  place  as  well  as  to  the  business.  If  the  name  is  given 
to  the  place,  it  adheres  to  the  place.  If  it  is  given  to  the 
business  it  goes  with  the  business.  The  difficulties  in 
particular  cases  of  determining  this  question  are  obvious, 
and  no  attempt  will  be  made  to  reconcile  the  conflicting 
decisions.  It  is  enough,  however,  to  suggest  that  if  a 
lessee  of  premises  where  he  conducts  his  business  desires 
to  secure  to  himself  all  the  profit  which  may  result  from 
the  good  will  that  he  will  establish,  he  should  see  to  it 
that  the  element  of  personality  is  emphasized  and  locality 
minimized.  On  the  other  hand,  if  the  lessor  or  owner 
of  the  premises  desires  to  have  the  good  will  which  his 
lessee  will  create  attach  to  the  premises  and  not  be  car- 
ried away  by  the  lessee  when  he  moves,  he  should  see  to 
it  that  the  locality  idea  is  stressed  and  the  personal 
subordinated. 

235 


CHAPTER  XXIV 

RIGHTS  IN  NAMES  OF  PATENTED 
AND  COPYRIGHTED  ARTICLES 


ONE  CLASS  of  names  the  courts  have  held  to  be 
descriptive  by  a  course  of  reasoning  which  is  not 
perhaps  convincing  to  persons  unused  to  legal  methods 
of  thought.  These  are  the  names  which  have  been  ap- 
plied to  patented  articles.  After  a  good  deal  of  dis- 
cussion and  many  diverse  decisions  the  courts  have  at 
last  with  substantial  unanimity  laid  down  the  rule  that 
the  name  applied  to  a  thing  covered  by  letters  patent 
is  descriptive. 

The  theory  is  that  the  article  cannot  be  the  subject  of 
patent  unless  it  is  absolutely  new.  Being  new  it  must 
have  a  name.  The  name,  therefore,  describes  a  new  thing 
and  becomes  the  descriptive  or  generic  name  of  that 
thing.  During  the  term  of  the  patent  the  right  to  use 
the  name  which  has  been  applied  to  the  thing  belongs 
exclusively  to  the  owner  of  the  patent,  who  may  license 
the  use  of  the  name  in  connection  with  the  patent,  and 
restrain  its  use  on  other  than  the  patented  article,  be- 
cause this  would  be  a  deceptive  misdescription.  No  par- 
ticular difficulty  is  experienced  during  the  life  of  the 
patent  because  its  owner,  having  the  exclusive  right  to 
make,  use  and  vend  the  patented  thing  and  being  able  to 
stop  the  use  of  the  name  on  articles  not  made  in  accord- 
ance with  the  patent,  enjoys  a  complete  monopoly  of  the 
article  and  name.  But  the  trouble  comes  when  the  patent 
expires.  Then  everyone  has  the  right  to  make  the  article, 
and  with  the  right  to  make  the  article,  the  courts  have 

236 


NAMES     UNDER     PATENT     OR     COPYRIGHT 

held  that  its  name  also  goes  to  the  public. 

Under  this  rule  it  has  been  held  that  the  name  "Singer 
Sewing  Machine"  is  public  property.  The  same  niing 
has  been  made  in  the  case  of  Castoria — Featherbo^  e — 
Linoleum — Goodyear  Rubber  and  others*  These  n*  nes 
can  be  used  to  describe  products  made  in  accordance  ith 
the  specifications  of  the  patents  under  which  the  ori£  aal 
articles  wpre  made. 

The  right  to  use  the  name  of  the  patented  thing  r  :er 
the  expiration  of  the  patent  is,  however,  coupled  wi  a 
corresponding  obligation — it  must  be  used  so  as  lot 
to  misrepresent  the  origin  of  the  goods.  Therefore,  v  lile 
the  public  has  the  right  to  make  Singer  Sewing  Mach  ics, 
other  manufacturers  than  the  Singer  Manufacturing 
Company  must  by  a  positive  announcement  or  in  some 
other  unmistakable  way  indicate  that  the  machines  are 
made  by  them  and  not  by  the  Singer  Company. 

The  same  rule  applies  to  books  on  which  the  copy- 
right has  expired.  Thus,  the  term  "Webster's  Diction- 
ary" has  been  held  to  be  a  descriptive  name,  but  others 
than  the  G.  &  C.  Merriam  Company  were  in  one  case 
compelled  to  distinguish  their  book  from  the  Merriam 
book  by  coupling  with  the  word  "Webster"  the  statement 
"This  dictionary  is  not  published  by  the  original  pub- 
lishers of  Webster's  Dictionary  or  by  their  successors". 

Where,  however,  the  name  indicates  the  commercial 
origin  of  the  article  and  is  not  generic,  it  does  not  pass 
to  the  public  with  the  expiration  of  the  monopoly;  as 
for  instance,  where  a  name  was  applied  to  an  article 
before  any  patented  features  were  embodied  in  it. 

A  person  who  claims  the  right  to  use  the  name  by 
which  an  article  made  under  an  expired  patent  is  known, 
must  justify  the  truthfulness  of  his  use. 

In  one  case  a  manufacturer  claimed  the  right  to  use 
the  name  "Singer"  upon  sewing  machines  made  by  him 
because,  he  contended,  the  Singer  patents  had  expired. 
But  it  developed  that  his  machines  were  not  made  in  ac- 
cordance with  the  expired  Singer  patents.  They  were  of 
a  type  known  as  the  "Domestic".  He  was  enjoined  ab- 

237 


RESTRAINING     UNFAIR     TRADE 

solutely  from  the  use  of  the  name  "Singer"  on  the  ground 
that  while  the  term  might  be  justified  if  truthfully  ap- 
plied, his  use  was  untruthful.  In  any  event  there  must 
be  no  contrivance  of  artifice  calculated  to  mislead  as 
to  the  make  of  the  product.  The  use  of  the  generic  name 
must  be  with  such  distinctions  as  will  clearly  indicate 
the  true  origin  of  the  article,  and  not  misrepresent  it. 

Another  phase  of  unfair  trading  which  has  been  the 
subject  of  much  discussion  and  misapprehension,  con- 
cerns the  names  of  publications.  Publishers  have  suffered 
from  the  depredations  of  the  commercial  as  well  as  the 
literary  pirate. 

PROTECTING  THE  GOOD  WILL  OF  A  PUBLISHER 

There  seems  to  be  a  great  amount  of  confusion  among 
the  decisions,  owing  to  the  tendency  of  the  judges  to 
regard  anything  and  everything  connected  with  a  book 
or  literary  production  in  the  light  of  copyright  princi- 
ples and  to  ignore  trade-marks  altogether.  The  copy- 
right law  does  not  protect  a  title.  The  title  is  protected, 
if  at  all,  on  the  same  theory  which  prohibits  the  deceptive 
use  of  names  attached  to  articles  of  merchandise.  The 
word  System  is.  just  as  much  the  trade  designation 
of  a  commodity  as  is  the  name  "Ivory"  upon  a  cake  of 
soap,  or  "Climax"  upon  a  plug  of  tobacco.  The  unau- 
thorized use  of  the  name  System  upon  a  periodical 
would  not  be  a  violation  of  literary  property  or  copy- 
right. It  would  be  an  ordinary  case  of  fraud  and  misrep- 
resentation as  to  the  origin  of  the  goods.  The  distinction 
was  clearly  pointed  out  many  years  ago  by  a  distin- 
guished English  judge,  who  said: 

Literary  property  is  liable  to  invasion  in  three  modes,  I  believe, 
and  three  modes  only.  It  arises,  first,  where  a  publisher  in  this 
country  publishes  the  work  openly,  or  where  a  man  introduces 
and  sells  a  reprint  made  abroad.  That  is  open  piracy.  It  arises, 
secondly,  where  a  man,  pretending  to  be  the  author  of  a  book, 
illegitimately  appropriates  the  fruit  of  a  previous  author's  literary 
labor.  That  is  literary  larceny.  These  are  the  two  things  against 
which  the  copyright  legislation  has  protected  an  author.  There 

238 


NAMES     UNDER     PATENT     OB     COPYRIGHT 

is  another  case,  which,  to  my  mind,  is  wholly  irrespective  of,  and 
anterior  to,  any  copyright  legislation  whatever:  that  is,  where  a  man 
is  selling  a  work  under  the  name  or  title  of  another  man,  or  an- 
other man's  work.  That  is  not  infringement  of  copyright.  That 
is  common  law  fraud.  It  is  to  be  redressed,  and  it  is  capable  of 
being  redressed  by  ordinary  common  law  remedies,  wholly  irrespective 
of  any  of  the  conditions  or  restrictions  imposed  by  the  copyright 
acts.  Supposing  a  man  were  to  publish  a  cookery  book,  calling  it 
Soyer's  Cookery  Book,  which  it  is  not;  or  Colenso's  Arithmetic, 
which  it  is  not;  or,  as  in  Metzler  v.  Wood,  "Hemy's  Pianoforte 
Tutor,"  which  it  is  not;  that  is  common  law  fraud.  That  has  noth- 
ing whatever  to  do  with  the  copyright  act.  It  is  not  subject  to  the 
conditions  of  the  act  as  to  registration  or  anything  of  the  kind.  But 
it  must  be  one  of  those  three  things  before  a  man  has  any  right 
to  complain. 

Applying  this  principle  the  courts  have  enjoined  im- 
itations of  various  identifying  features  of  works  of 
literature,  art  and  music,  such  as  the  name  "Sherlock 
Holmes"  as  applied  to  a  drama;  the  "Automobile  Blue 
Book";  "The  Hagerstown  Almanac";  "The  Grocer's 
Journal";  "Nick  Carter";  "Bell's  Life";  and  "The 
Social  Register". 

"Comfort"  was  held  infringed  by  "Home  Comfort"; 
"Payson  Dunton  &  Scribner's  National  System  of  Pen- 
manship", by  "Independent  National  Systems  of  Pen- 
manship"; "Chatterbox",  by  "Chatterbook" ;  "Suburban 
Life",  by  "Philadelphia  Suburban  Life";  "Chanticleer", 
by  a  burlesque  under  the  name  "Chanteclair",  and  "Ben 
Hur",  by  "Bun  Her". 

The  infringer  is  no  respecter  of  persons — the  use  of 
the  name  "Oxford  Bible"  by  an  American  publisher  was 
enjoined  by  the  University  of  Oxford,  and  the  "National 
Police  Gazette"  enjoined  the  use  of  the  words  "United 
States  Police  Gazette". 

These  cases  were  all  decided  on  principles  analogous 
to  those  applied  to  the  use  or  imitation  of  trade-marks 
and  identifying  words,  and  not  upon  any  theory  of  ex- 
clusive literary  property.  A  little  reflection  will  demon- 
strate that  this  must  be  so.  Copyright  and  literary 
property  are  concerned  exclusively  with  the  matter  be- 
tween the  covers  of  a  book  as  a  piece  of  literature.  In 
many  cases  the  literary  element  completely  overshadows 

239 


RESTRAINING     UNFAIR     TRADE 

everything  else.  The  name  immediately  suggests  the 
authorship  of  an  individual  to  the  exclusion  of  other 
things.  The  fact  that  the  work  may  have  been  given 
to  the  world  by  one  firm  of  publishers  rather  than  an- 
other is  of  no  consequence.  "Bleak  House"  to  anyone 
suggests  Dickens,  the  author,  not  Bradbury  &  Evans,  the 
publishers.  On  the  other  hand,  books  are  merchandise 
as  well  as  literature.  They  are  merchandise  in  two  ways. 
As  literature  they  are  salable  by  the  author  to  the  pub- 
lisher, and  as  the  work  of  a  particular  author  or  pub- 
lisher, they  are  salable  to  the  public.  There  is  then  an 
author's  good  will  for  his  literary  merchandise,  which 
the  courts  have  protected,  and  a  publisher's  good  will  for 
the  mechanical  excellence  of  his  product. 

PROTECTING  THE  AUTHOR'S  GOOD  WILL 

A  number  of  cases  have  arisen  where  writers  have  suc- 
ceeded in  enjoining  the  offering  under  their  names  of 
books  which  they  did  not  write.  Lord  Byron  sued  and 
stopped  a  publisher  from  publishing  poems  claimed  to  be 
by  him,  but  which  were  not.  Mark  Twain  stopped  the 
issue  of  a  sketch  "by  Mark  Twain"  which  he  did  not 
write.  Other  authors  have  enjoined  the  publication  not 
only  of  wholly  spurious  works  but  of  mutilated  versions 
of  their  genuine  writings.  This  is  exactly  analogous  to 
the  protection  given  to  names  and  brands  of  commodities. 
A  writer  has  a  good  will  in  connection  with  the  merchan- 
dise he  produces  and  deals  in — literature.  He  is  entitled 
to  be  and  is  protected  against  the  theft  of  his  unpublished 
work  by  the  common  law  and  against  the  unauthorized 
copying  of  his  published  work  by  the  copyright  statutes ; 
he  is  also  entitled  to  be  and  is  protected  against  the  offer- 
ing of  any  work  as  his  which  is  not  his — exactly  as  a 
merchant  in  any  other  commodity  is  protected. 

"Tales  by  Rudyard  Kipling"  is  a  representation  that 
Rudyard  Kipling  wrote  the  tales.  If  he  did  not  he  is 
being  injured,  and  the  public  is  likely  to  be  defrauded. 
The  courts  therefore  grant  relief  exactly  as  they  do  in 

240 


NAMES  UNDER  PATENT  OR  COPYRIGHT 

cases  involving  the  infringement  of  trade-marks. 

Many  book  titles,  however,  cannot  indicate  literary 
contents  or  authorship.  Newspaper,  magazine  and 
periodical  names  are  examples.  The  literary  matter 
varies  from  day  to  day  or  month  to  month.  The  names 
Saturday  Evening  Post,  System,  The  Century  Magazine, 
The  Atlantic  do  not  guarantee  to  the  purchaser  that  this 
week's  or  month's  issue  has  the  same  literary  contents 
as  the  last,  or  anything  as  to  the  individual  authors  or 
contributors  whose  work  may  be  between  the  covers,  but 
they  are  a  guarantee  of  the  continuance  of  certain  desir- 
able qualities.  These  names  represent  good  will  and  are  a 
means  of  identification  which  secure  and  make  possible 
continued  patronage.  In  this  respect  they  are  exactly 
like  flour  brands  or  cigar  labels  and  are  protected  against 
deceptive  use  and  imitation  by  others  on  precisely  the 
same  principles.  So  also  are  the  names  given  to  series 
of  books,  particular  sets  or  editions.  The  question  always 
is,  does  the  name  or  title  distinguish  the  books  not  as 
literature,  but  as  merchandise  from  other  books  as 
merchandise.  If  it  does,  it  performs  the  function  of  a 
trade-mark  and  should  be  protected  as  such. 

The  considerations  elsewhere  discussed  with  reference 
to  the  use  of  distinctive  names  and  appearance  of  mer- 
chandise generally  apply  equally  to  books.  There  are 
elements  which  enter  into  the  marketing  of  newspapers 
and  periodicals  where  successive  purchases  by  the  same 
individuals  are  sought,  which  of  course  do  not  apply  to 
the  sale  of  isolated  books,  but  even  here  it  has  always 
seemed  to  me  that  certain  principles  of  merchandising 
found  successful  in  other  businesses  could  profitably  be 
followed. 

Trade  and  distinctive  marks  of  publishers  could  very 
well  be  more  extensively  used  than  they  are,  and  thus 
one  successful  book  be  made  to  help  the  sales  of  the  fu- 
ture offerings  of  the  same  publisher.  We  may  if  we 
choose,  decry  the  commercializing  of  the  drama,  but  the 
fact  remains  that  the  keen  business  men  who  have  con- 
trolled things  for  the  last  ten  or  fifteen  years  have  there 

241 


RESTRAINING     UNFAIR     TRADE 

applied  with  success  the  principles  tested  in  other  lines  of 
business.  This  is  particularly  true  of  the  moving  picture 
producers  who  have  recently  started  the  widespread  and 
persistent  use  of  trade-marks  in  connection  with  their  pro- 
ductions. Habitues  of  the  "movies"  will  pay  their  money 
to  see  a  Pathe  or  Essanay  film  solely  on  the  faith  that 
they  will  see  a  good  show,  inspired  by  past  experience 
with  films  bearing  these  brands. 

With  the  generality  of  people  purchasing  their  period- 
ical reading  matter  very  much  as  they  do  their  soap  or 
their  cigars,  an  attractive  dress  and  easily  recalled  name 
are  quite  as  valuable  in  the  one  case  as  in  the  other.  Uni- 
formity of  style,  insuring  instant  and  ready  recognition, 
are  important  in  securing  continued  patronage  whether 
the  merchandise  is  sold  at  the  end  of  the  news-stand 
devoted  to  cigars  or  at  the  end  where  magazines  are 
displayed. 

Other  methods  successfully  employed  in  the  sale  of 
merchandise  can  well  be  applied  to  the  sale  of  literary 
and  artistic  merchandise,  and  chief  among  these  is  the 
furnishing  to  the  once  pleased  patron  unmistakable  as- 
surance by  definite  means  of  identification  that  he  is 
again  buying  the  make  of  art  or  literature  which  pleased 
him  before.  He  can  then  be  sure  that  he  is  taking  less 
of  a  chance  of  being  disappointed  than  by  giving  his 
patronage  to  one  with  whom  he  has  had  no  previous  ex- 
perience. 

In  the  case  of  periodical  publications  having  a  large 
news-stand  circulation  a  ready  and  definite  means  of 
identification  is  as  necessary  as  in  any  other  merchandise. 
It  helps  the  person  who  has  bought  before  to  buy  again 
without  uncertainty  or  loss  of  time,  and  secures  to  him 
whose  previous  efforts  have  produced  the  desire,  the  bene- 
fit of  the  preference. 


243 


CHAPTER  XXV 

THE   DECEPTIVE  USE   OF 
COMMUNITY   MARKS 


BY  "COMMUNITY  MARKS"  I  mean  not  necessar- 
ily marks  applicable  to  geographical  communities, 
but  those  which  are  rightfully  used  by  a  group  of  persons, 
or  at  least  by  more  than  one.  Certain  geographical 
names,  which  will  readily  occur  to  anyone,  illustrate  one 
aspect  of  what  I  have  in  mind.  Particular  places  have 
a  reputation  for  producing  meritorious  goods.  This  may 
be  caused  either  on  account  of  some  natural  advantage 
of  the  place,  the  fact  that  a  natural  product  originates 
there,  as  in  the  case  of  mineral  waters,  beds  of  coal,  clay 
and  the  like,  or  because  the  manufacturers  of  such  a 
place,  by  their  own  capability  or  the  advantage  of  local- 
ity, have  a  reputation  for  manufacturing  excellent  goods. 
Producers  in  a  reputable  locality,  whether  the  reputa- 
tion of  their  goods  is  derived  from  their  own  skill  or  from 
the  fact  that  nature  has  been  good  to  that  particular 
place,  are  entitled  to  whatever  advantage  ensues  from 
their  location  there,  and  it  is  manifestly  unfair  for  per- 
sons outside  of  the  reputable  locality  falsely  to  use  its 
name  for  the  purpose  of  taking  advantage  of  this  repu- 
tation. The  public,  too,  has  a  right  to  obtain  under  the 
place  name  the  genuine  article  coming  from  the  place. 
In  the  discussion  of  unfair  competition  by  the  decep- 
tive use  of  geographical  names  the  case  of  the  Minne- 
apolis millers  was  cited.  Here  all  the  flour  millers  of 
Minneapolis,  whose  efforts  had  given  the  name  "Minne- 
apolis" a  value  in  connection  with  flour,  successfully  en- 

243 


RESTRAINING     UNFAIR     TRADE 

joined  a  Chicago  grocer  from  branding  flour  coming 
from  Milwaukee  "Eagle's  Best  Minnesota  Patent,  Minne- 
apolis, Minn.". 

In  a  similar  way  the  city  of  Carlsbad  enjo'ined  a  New 
York  druggist  from  selling  a  powder  made  without  the 
use  of  the  genuine  Carlsbad  water  under  the  name  "Im- 
proved Effervescent  Carlsbad  Powder". 

The  proprietors  of  the  Blue  Lick  Springs  in  Nicholas 
County,  Kentucky,  were  successful  in  stopping  the  use 
of  the  words  "Blue  Lick"  by  H.  P.  Northcut  in  con- 
nection with  his  advertisement  and  sale  of  water  from  an 
artesian  well  in  Campbell  County. 

The  right  of  honest  users  of  place  names  to  stop  dis- 
honest users  was  not  thoroughly  established  in  this  coun- 
try until  the  decision  in  the  millers  case  just  referred  to. 
It  had,  however,  been  recognized  in  continental  Europe 
for  many  years. 

The  wine  growers  in  the  District  of  Champagne  were 
successful  before  the  French  courts  in  enjoining  pro- 
ducers outside  of  this  district  from  the  use  of  the  word 
"Champagne"  upon  sparkling  wine.  The  Court  of  Ap- 
peals of  Angers  in  1891  enjoined  a  producer  of  wines  in 
Saumur  from  designating  his  product  "Champagne"  in 
menus,  prospectuses  and  advertisements  circulated  in 
England,  on  the  theory  that  "Champagne"  meant  a  prod- 
uct from  the  District  of  Champagne,  and  that  Saumur 
is  not  in  that  district.  There  are  many  French  deci- 
sions along  similar  lines.  The  wine  producers  in  the 
vicinity  of  Rheims  and  Epernay  have  been  diligent  and 
successful  in  prosecuting  vineyard  proprietors  in  other 
districts  for  the  false  use  of  the  word  "Champagne". 

This  controversy  culminated  in  the  delimitation  decree 
of  Deci.  7,  1909,  by  which  it  was  sought  to  restrict  the 
application  of  the  word  "Champagne"  to  wines  grown 
in  the  department  of  the  Marne  and  some  adjacent  com- 
munes in  the  departments  of  Aisne  and  Haute-Marne. 
The  outsiders  protested,  and  getting  no  results,  indulged 
in  violent  demonstrations,  destroying  vast  amounts  of 
property.  Quiet  was  only  restored  after  a  promise  that 

244 


COMMUNITY      MARKS 

all  attempt  at  delimitation  should  be  given  up. 

In  the  same  way  in  Germany  the  brewers  of  the  town 
of  Pilsen  have  been  successful  in  the  German  courts  in 
stopping  dealers  outside  of  Pilsen  from  branding  their 
beer  "Pilsener  Beer". 

The  decisions  of  the  courts  both  in  this  country  and 
in  Europe  thus  many  years  anticipated  the  pure  food 
laws  and  stopped  by  private  action  false  indications  of 
geographical  origin  quite  as  effectively  as  the  present 
pure  food  acts  do  by  public  enactment.  Some  unsuc- 
cessful attempts  have  been  made  to  stop  this  sort  of  un- 
fair trading,  but  the  lack  of  success  in  such  cases  has 
been  due  very  largely  to  a  failure  to  appreciate  the 
theory  on  which  the  law  affords  relief. 

It  was  sought  a  number  of  years  ago  by  the  Key  West 
Cigar  Manufacturers'  Association  to  enjoin  manufac- 
turers of  cigars  in  New  York  from  stamping  upon  their 
boxes  the  words  "Key  West"  on  the  ground  that  this 
was  a  representation  that  the  cigars  were  made  in  Key 
West,  and  therefore  calculated  to  injure  the  value  of  that 
name  to  the  producer  of  cigars  in  that  city.  The  suit 
brought  by  the  association,  a  corporation,  was  unsuccess- 
ful. The  court  held  that  the  association  as  such  could 
not  bring  an  action  because  it  was  not  in  business,  was 
not  using  the  name  upon  any  goods,  and  hence  suffered 
no  injury,  but  that  the  members  of  the  association  in- 
dividually or  collectively  might  sue  for  the  reason  that 
the  false  use  of  the  name  "Key  West",  which  they  were 
rightfully  using  in  their  trade,  was  an  injury  to  them. 

The  California  Canning  Association  in  another  suit 
was  successful  in  enjoining  the  use  of  the  word  "Cali- 
fornia" on  canned  pears  made  in  Baltimore  because  it 
appeared  that  the  association  itself  was  engaged  in  the 
canning  of  pears  and  was  using  the  name  "California" 
as  a  trade  designation,  and  hence  was  injured  by  its 
misuse. 

The  same  rule  was  applied  many  years  ago  in  con- 
nection with  the  misuse  of  the  union  cigar  label.  This 
familiar  blue  strip  upon  cigar  boxes  is  supposed  to  in- 

245 


RESTRAINING     UNFAIR     TRADE 

dicate  that  cigars  to  which  it  is  attached  are  made  by 
union  workmen  and  not  in  prisons  or  tenement  houses. 
Manufacturers  of  cigars  operating  non-union  shops 
used  an  imitation  of  this  label  upon  their  boxes  and  the 
Cigar  Makers'  Union  sued  to  enjoin  the  unfair  trading 
thus  accomplished.  While  there  are  one  or  two  deci- 
sions to  the  contrary,  the  majority  of  the  courts  held 
that  the  union  as  a  union  was  not  injured  by  this  con- 
duct, but  that  the  individual  members,  who  were  right- 
fully using  the  union  label,  could  properly  bring  a  suit; 
and  later  the  federal  court  squarely  accepted  this  doc- 
trine and  enjoined  at  the  suit  of  an  individual  union 
member  the  use  of  the  union  label  by  any  person  not  a 
member  of  the  union. 

Thus  it  will  be  seen  that  the  community  mark  theory 
does  not  apply  exclusively  to  communities  in  a  geograph- 
ical sense. 

ESTABLISHING  THE  RIGHT  TO  A  PERSONAL  MARK 

It  has  been  applied  in  the  case  of  personal  names. 
There  were  a  number  of  silversmiths  in  the  country  named 
"Rogers"  who  distinguished  their  products  one  from  the 
other  by  some  efficient  means.  Each  of  these  men  and 
their  successors  had  a  right  to  use  the  name,  but  it  has 
been  held  that  any  of  them  might  bring  an  action  to 
restrain  the  piratical  use  of  the  name  "Rogers"  by  a 
new  comer. 

A  similar  ruling  was  made  in  the  cases  involving 
Clark's  Thread.  The  fact  that  the  "Mile  End"  Clarks 
had  an  equal  right  with  the  Clark  Thread  Company  to 
use  the  name  "Clark"  was  no  justification  for  the  use 
of  the  word  "Clark"  by  an  interloper  for  the  purpose 
of  stealing  the  business  of  those  rightfully  using  the 
name.  The  court  concluded  its  judgment  as  follows: 

A,  who  has  a  right  to  a  trade  name,  may  prevent  C,  who  has  no 
right,  from  using  it,  even  though  B,  who  has  an  equal  right  with 
A,  does  not  object  to  use  by  C.  One  who  has  an  interest  in  the 
preserve  can,  without  the  co-operation  of  his  co-tenant,  punish  the 
common  poacher. 

246 


COMMUNITY     MARKS 

Along  lines  similar  to  the  union  label  case  just  re- 
ferred to  are  a  number  of  English  cases  having  to  do  with 
false  indications  of  membership  in  societies  and  the  like. 

The  Society  of  Accountants  in  Edinburgh,  the  In- 
stitute of  Accountants  and  Actuaries  in  Glasgow  and 
Society  of  Accountants  in  Aberdeen  and  individual  mem- 
bers of  each  joined  in  a  suit  to  prevent  a  concern,  calling 
itself  The  Corporation  of  Accountants,  Ltd.,  and  certain 
members,  from  using  the  letters  "C.  A.".  In  Great 
Britain  great  value  is  attached  to  these  letters  because 
they  import  that  persons  using  them  are  chartered  ac- 
countants. Complainants  in  this  action  were  the  only 
ones  incorporated  by  royal  charter  and  hence  they  con- 
tended the  only  ones  entitled  to  authorize  their  mem- 
bers to  use  the  letters  "C.  A.".  These  letters  had  long 
been  used  to  distinguish  members  of  these  organizations 
and  were  so  understood  by  the  public. 

Speaking  of  the  use  of  the  letters  "C.  A."  by  members 
of  the  defendant  society  (it  was  asserted  that  these  let- 
ters meant  corporate  accountants)  one  of  the  judges 
observed : 

In  doing  so  they  are  holding  themselves  out  as  being  in  the  same 
position  professionally  as  the  members  of  the  society  incorporated 
by  royal  charter.  I  am  satisfied  on  the  proof  that  the  intention 
of  the  members  of  this  company  in  using  these  letters  is  that  they 
may  pass  for  chartered  accountants  belonging  to  the  chartered  socie- 
ties and  get  the  benefit  of  their  being  supposed  to  be  such.  No  other 
purpose  can  well  be  suggested  and  I  see  none  and  none  is  in  fact 
suggested.  *  *  *  If  a  public  body  has  adopted  a  name  and  a 
certain  abbreviation  of  that  name  has  been  publicly  accepted  and 
understood  to  belong  to  the  members  of  that  body,  there  arises 
a  legal  right  to  prevent  the  unauthorized  use  of  that  designation 
by  persons  who  desire  to  get  the  advantage  of  the  reputation  at- 
taching to  it. 

One  of  the  other  judges,  who  by  the  way  was  a  choleric 
Scotchman,  had  little  patience  with  the  defendant's  con- 
duct. He  said: 

The  answer  is,  "Oh,  we  are  doing  it,  we  have  been  doing  it,  and 
we  mean  to  continue  doing  it.  It  is  our  right  to  mislead  the  public 
by  representing  that  we  are  members  of  the  incorporated  societies, 

247 


RESTRAINING     UNFAIR     TRADE 

which  we  are  not."  Did  your  Lordships  ever  hear  of  such  a  right 
put  into  plain  language  in  a  Court  of  Justice?  The  interdict  asked 
for  is  that  they  shall  be  prohibited  and  no  more  from  using  language 
which  will  mislead  the  public  into  believing  that  they  are  members 
of  an  incorporated  society,  of  which  they  are  not  members.  They 
say  they  are  not  members  and  that  they  are  misleading  the  public 
and  that  they  have  a  right  to  do  it,  or  at  all  events  that  no  one 
has  a  right  to  complain.  I  think  that  is  nonsense  on  the  face  of 
it,  and  I  do  not  think  the  case  presents  any  difficulty  either  in 
fact  or  in  law. 

In  one  of  the  English  courts  a  similar  result  was  ob- 
tained where  the  Incorporated  Society  of  Accountants 
designated  themselves  as  "Incorporated  Accountants",. 
The  defendant,  not  a  member  of  the  society,  advertised 
himself  as  an  incorporated  accountant  and  was  enjoined. 

If  these  decisions  should  be  carried  to  their  logical 
conclusion,  a  good  deal  of  advertising  fraud  could  read- 
ily be  prevented.  For  example,  a  quack  doctor  attaches 
to  his  name  professional  degrees  to  which  he  is  not  en- 
titled and  represents  himself  to  be  a  member  of  learned 
societies  of  which  he  is  not  a  member,  or  an  architect 
falsely  represents  himself  to  be  a  member  of  the  Ameri- 
can Institute  of  Architects.  They  could  be  stopped  from 
doing  so  not  on  account  of  the  violation  of  any  penal 
statute,  but  as  a  result  of  a  private  suit  on  the  theory 
that  such  use  caused  or  made  possible  an  unfair  com- 
petition between  the  impostor  and  the  professional  man 
rightfully  using  the  designations. 

STOPPING  THE  FRAUDULENT  USE  OF  A  DESCRIPTIVE  TERM 

False  use  of  geographical  community  names  thus  be- 
ing unlawful,  false  use  of  group  personal  names  being  en- 
joinable,  false  representation  as  to  membership  in  socie- 
ties and  the  like  having  been  held  to  be  misleading  and 
capable  of  being  stopped  by  those  rightfully  using  the 
name  or  designation,  it  would  seem  as  if  the  next  step 
logically  should  be  that  false  use  of  a  descriptive  designa- 
tion could  be  stopped  by  anyone  using  the  descriptive 
term  truthfully. 

While  the  courts  have  not  yet  arrived  at  a  position 

248 


COMMUNITY     MARKS 

where  they  have  accepted  this  last  suggestion  without 
reserve,  still  there  are  some  cases  in  which  they  come 
very  close  to  it.  For  example,  Wm.  Bengers  Sons  of 
Stuttgart  since  1879  had  been  manufacturers  of  under- 
wear which  they  designated  "Dr.  Jaeger's  Normal  Under- 
wear", but  chiefly  by  the  terms  "Dr.  Jaeger"  and  "Jaeger". 
The  manufacture  was  supervised  by  Professor  or  Doctor 
Gustav  Jaeger,  who  gave  his  consent  to  the  use  of  the 
name.  The  desirable  feature  of  this  underwear  was  sup- 
posed to  reside  in  the  fact  that  it  was  made  entirely  of 
animal  fibre.  An  exclusive  right  was  given  to  Dr.  Jae- 
ger's Sanitary  Woolen  System  Company  for  the  United 
States.  LeBoutillier  Bros,  put  upon  the  market  under- 
wear not  manufactured  by  Dr.  Jaeger  or  his  licensees 
which  they  described  as  "Jaeger's  Underwear".  They 
justified  their  assumption  of  the  name  by  contending  that 
underwear  of  the  character  described  was  known  as  "Jae- 
ger's Underwear"  or  "Jaeger's  System  Underwear"  by 
whomever  made,  and  that  the  name  indicated  simply  that 
the  product  was  made  in  accordance  with  Dr.  Jaeger's 
hygienic  notions  and  did  not  represent  that  it  was  made 
by  him  or  his  licensees.  It  was  held  that  this  contention 
was  made  out  and  that  the  appellation  "Jaeger"  had  no 
necessary  relation  to  the  origin  of  the  goods,  but  only 
indicated  their  style  or  quality.  "The  name  'Jaeger'," 
said  the  court,  "applied  to  underwear  implies  an  idea". 
It  appeared,  however,  that  the  defendant  was  selling  for 
genuine  Jaeger  underwear  goods  that  were  part  cotton. 
It  was  held  that  this  was  properly  enjoinable.  The  court 
observed : 

The  plaintiff's  right  to  use  the  name  "Jaeger",  as  designating 
underwear  made  in  accordance  with  the  Jaeger  system,  is  so 
qualifiedly  exclusive  that  its  right  to  protection  of  its  use  against 
infringement  by  others  rests  upon  the  ground  that  such  use  by  them 
is  an  untrue  or  deceptive  representation.  The  application  of 
the  name  "Jaeger",  or  "Jaeger  System"  to  underwear  contain- 
ing an  admixture  of  cotton  is  an  untrue  and  deceptive  repre- 
sentation, and,  as  against  such  a  use,  the  plaintiff  is  entitled  to 
relief.  It  is  a  false  representation  of  fact,  which  tends  to  confuse 
the  identity  of  the  defendant's  goods,  not  made  after  the  Jaeger 

249 


RESTRAINING     UNFAIR     TRADE 

system,  with  the  goods  of  the  plaintiff,  made  in  accordance  with 
that  system,  and  creates  a  dishonest  competition,  detrimental  to 
the  plaintiff.  One  of  the  uses  by  the  defendant  of  the  name  "Jaeger" 
to  designate  underwear  containing  an  admixture  of  cotton  must 
be  held  to  be  for  the  purpose  of  taking  advantage  of  the  reputation 
the  all-wool  Jaeger  goods  have  acquired,  and  of  the  Jaeger  name, 
as  applied  thereto.  The  application  of  the  name  "Jaeger"  by  the 
defendant  to  goods  part  cotton  tends  to  deceive  the  purchasers  and 
users  of  plaintiff's  goods,  and  actually  mislead  them  into  buying  the 
goods  containing  cotton  sold  by  defendant,  in  the  belief  that  they 
are  the  goods  dealt  in  by  the  plaintiff.  Moreover,  since  the  goods 
containing  an  admixture  of  cotton  can  be  profitably  sold  at  a  less 
price  than  the  all-wool  goods,  the  tendency  must  be  to  unfairly 
divert  custom  from  the  plaintiff  to  the  defendant. 

This  rule  must  of  course  be  a  workable  one.  Suppose, 
for  example,  a  distiller  made  a  reputation  for  distilling 
whiskey  of  excellent  quality  and  which  was  in  fact  pure 
rye  whiskey.  Would  he  have  a  right  by  private  action 
to  stop  another  distiller  who  made  greatly  inferior 
goods,  not  rye  whiskey  at  all,  from  describing  his  prod- 
uct as  "pure  rye  whiskey"?  To  carry  it  still  further, 
would  he  have  a  right  to  enjoin  a  rival  from  selling  a 
mixture  of  caramel,  raw  spirits  and  prune  juice  under 
the  name  "pure  rye  whiskey"?  Under  such  circumstances 
our  courts  today  would  be  likely  to  hold  that  the  injury 
to  particular  individuals  would  be  so  remote  that  it  would 
not  be  a  case  for  private  action  but  for  redress  under 
public  statute;  that  this  conduct  would  affect  all  of  the 
public  rather  than  an  individual  competitor,  and  that  a 
private  action  could  not  be  maintained.  Considerations 
of  this  sort  doubtless  contributed  to  the  enactment  of  the 
pure  food  laws  in  this  country,  merchandise  marks 
acts  in  Great  Britain  and  similar  laws  in  other  juris- 
dictions. As  soon,  however,  as  the  misdescription  can  be 
shown  to  affect  injuriously  a  particular  producer  or 
group  of  producers  to  such  an  extent  that  they  are  ap- 
preciably damaged  by  it,  it  seems  to  me  that  under  the 
present  state  of  the  law  as  shown  by  the  decisions  about 
briefly  referred  to,  the  powers  of  a  court  of  equity  are 
ample  to  deal  with  the  situation.  Apparently  the  princi- 
pal reason  why  the  jurisdiction  of  this  court  is  not  in- 

250 


COMMUNITY     MARKS 

voked  to  stop  this  kind  of  fraud  because  of  the  preva- 
lent belief  that  there  must  be  a  specific  statute  aimed  at 
every  wrong  before  it  is  legally  cognizable  and  capable 
of  being  redressed. 

THE  RULE  THAT  GOVERNS  UNFAIR  TRADING 

As  far  back  as  1886,  when  the  law  of  unfair  competi- 
tion was  in  its  infancy,  a  distinguished  Federal  judge 
announced  the  rule: 

"The  interposition  of  a  Court  of  Equity  is  frequently  invoked  and 
always  successfully  to  restrain  unlawful  competition  in  trade.  All 
practices  between  rivals  in  business  which  tend  to  engender  unfair 
competition  are  odious  and  will  be  suppressed  by  injunction.  A 
merchant  or  trader  will  be  protected  against  the  fraudulent  or  de- 
ceptive simulations  by  a  competitor  of  tokens  which  tend  to  confuse 
the  identity  of  business  of  one  with  the  other  and  against  the  false 
representation  of  facts  which  tend  to  mislead  the  public  and  divert 
custom  from  the  one  to  the  other." 

There  has  been  no  disposition,  so  far  as  I  am  aware, 
on  the  part  of  any  of  the  courts  to  recede  from  this 
enlightened  view.  On  the  contrary  in  a  very  recent  case 
the  Circuit  Court  of  Appeals  of  the  Second  Circuit  made 
use  of  this  language: 

We  cannot  resist  the  conclusion  that  the  defendants  take  too 
narrow  a  view  of  the  law  as  it  relates  to  unfair  competition.  The 
law  has  a  three-fold  object:  first,  to  protect  the  honest  trader 
in  the  business  which  fairly  belongs  to  him;  second,  to  punish  the 
dishonest  trader  who  is  taking  his  competitor's  business  away  by 
unfair  means;  and,  third,  to  protect  the  public  from  deception. 

It  was  said  a  good  many  years  ago  by  high  judicial 
authority  that  the  courts  do  not  interfere  to  prevent  the 
public  at  large  being  misled  into  anything  and  that  mere 
lying  descriptions  of  articles  sold  create  no  right  to  sue 
on  the  part  of  anyone,  except  the  individual  purchaser 
who  may  have  been  defrauded.  There  is,  however,  an 
aspect  of  the  misdescription  of  goods  on  packages  and  in 
advertisements  which  is  in  all  essential  respects  unfair 
competition,  using  the  phrase  in  its  broad  sense.  For 
example,  the  false  advertisement  or  description  by  a 

251 


RESTRAINING     UNFAIR     TRADE 

dealer  of  cloth  which  is  partly  cotton  as  "all  wool",  is 
unfair  and  ought  to  be  unlawful — unlawful  because  mor- 
ally wrong  and  designed  to  cheat,  and  unfair  because  if 
the  misdescribed  goods  are  sold  at  the  prices  of  genuine 
woolens  a  higher  rate  of  profit  is  obtained  than  would 
be  possible  if  the  goods  were  sold  for  what  they  are,  or 
they  can  be  profitably  sold  at  a  less  price  than  genuine 
woolens.  In  either  event  producers  of  genuine  "all  wool" 
goods  are  compelled  to  meet  a  dishonest  competition. 
They  are  regarded  by  the  public  as  extortioners  because 
they  make  honest  goods,  sell  them  for  what  they  are,  and 
ask  a  fair  price  for  them. 

A  manufacturer  of  egg  noodles  which  really  contain 
eggs  and  naturally  cost  more  than  noodles  without  eggs, 
ought  not  to  have  to  compete  with  a  man  who  adver- 
tises as  egg  noodles  a  product  which  is  innocent  of  eggs. 
The  public  has  no  way  of  telling  whether  the  representa- 
tion is  true  or  not,  but  is  inclined  to  regard  the  cheat  as 
a  benefactor  and  the  honest  advertiser  as  a  robber.  The 
honest  producer  of  condensed  or  evaporated  milk,  who 
truthfully  states  the  proper  dilution  to  obtain  a  sub- 
stance fit  to  be  used,  suffers  from  the  advertisements  of 
less  scrupulous  competitors  who  advise  the  use  with  their 
goods  of  an  excessive  amount  of  water  and  advertise  the 
attenuated  substance  resulting  as  "milk  as  pure  and  rich 
as  the  cow  gave  it",  thus  creating  the  impression  that 
theirs  is  an  article  of  peculiar  excellence  and  the  honest 
advertiser's  product  inferior  or  at  least  excessively 
priced.  Entirely  apart  from  the  deception  of  the  public 
involved,  these  and  like  artifices  are  unfair  to  all  dealers 
in  the  same  commodity  who  advertise  their  goods 
honestly. 

The  advertisement  of  imaginary  "fire  sales",  sales  of 
"bankrupt  stocks",  "overloaded  manufacturers'  surplus", 
fraudulent  "mark  down  sales"  and  the  like  are  other 
examples  of  a  similar  business  depravity.  The  merchant 
with  a  conscience  and  a  sense  of  sportsmanship  suffers 
unfairly  from  such  practices.  They  engender  an  un- 
healthy competition,  which  does  not  benefit  the  public  and 

252 


COMMUNITY      MARKS 

which  an  honest  man  cannot  meet.  Many  business  men 
who  despise  such  methods  find  themselves  forced  to  adopt 
them  because  they  cannot  stay  in  business  unless  they 
do.  The  result  is  often  a  trade  demoralization  that  is 
deplorable. 

The  laws  against  unfair  competition,  as  they  exist  in 
Germany  and  Denmark,  for  example,  give  redress  in 
these  and  similar  cases.  The  Merchandise  Marks  Act 
in  England  covers  also  certain  phases  of  this  sort  of 
unfair  business.  In  this  respect  we,  in  the  United  States, 
are  backward.  The  Federal  Food  and  Drugs  Act,  which 
is  now  limited  in  scope  to  the  adulteration  and  misbrand- 
ing  of  foods  and  drugs,  could  profitably  be  extended  to 
include  all  merchandise  which  is  the  subject  of  interstate 
commerce;  further  than  this,  the  law  of  unfair  compe- 
tition, either  by  statute  or  otherwise,  might  well  be  ex- 
panded so  as  to  prohibit  and  penalize  such  manifestly 
unfair  practices.  If  a  private  right  of  action  were 
created,  or  the  law  could  be  set  in  motion  by  who  ever 
might  suffer  by  the  conduct  forbidden,  such  commercial 
knavery  would  soon  become  dangerous.  This  change 
would  probably  put  certain  advertisement  writers  out  of 
employment,  but  they  could  devote  their  enforced  leisure 
to  the  production  of  fiction  of  a  less  injurious  sort. 


253 


CHAPTER  XXVI 

HOW  FAR  DO  TRADE-MARK 
RIGHTS  EXTEND? 


1HAVE  tried  to  make  clear  that  a  trade-mark  is  not 
a  monopoly  in  the  sense  that  it  involves  any  exclusive 
right  to  make  or  sell  as  a  commodity  the  article  to  which 
it  is  applied.  It  is  not  analogous  to  a  patent  or  copy- 
right. It  is  a  badge  of  identification  which  distinguishes 
the  merchandise  of  one  trader  from  the  similar  goods  of 
others.  It  is  a  handy  means  of  telling  the  purchaser  who 
is  responsible  for  the  article  to  which  it  is  applied. 

The  value  of  his  trade-mark  to  the  owner  equals  the 
friendliness  which  the  fact  it  announces  or  implies  in- 
spires in  the  buyer  of  the  goods  bearing  it. 

The  buyer  probably  does  not  put  his  ideas  into  syl- 
logistic form.  Ale  with  a  red  triangle  on  the  label  is  Bass' 
ale.  Bass'  ale  is  good  ale.  Therefore  ale  with  a  red 
triangle  on  the  label  is  good  ale.  He  jumps  to  his  con- 
clusion— ale  bearing  a  red  triangle  is  good  ale — but  the 
whole  syllogism  is  there  just  the  same.  The  ale  is  good, 
not  because  it  has  a  red  triangle  on  the  label,  but  because 
it  is  Bass' — and  the  red  triangle  is  a  simple  way  of  stat- 
ing the  fact.  With  these  things  in  mind,  what  are  the 
limits  to  Bass'  right  to  a  red  triangle? 

We  must  assume  that  the  red  triangle  inspires  good 
will,  not  ill  will — a  desire  to  buy,  not  to  refrain  from 
buying.  Marks  which  induce  ill  will  are  not  imitated — 
they  inspire  no  interest  in  the  pirate. 

Even  burglars  keep  away  from  a  house  with  a  sign 
"small-pox  here"  on  it. 

2.54 


SIMILAR     MARKS     ON     UNLIKE     PRODUCTS 

Another  brewer  puts  out  his  ale  with  labels  bearing  a 
red  triangle.  The  courts  stop  him,  because  as  applied 
to  his  goods  the  red  triangle  is  a  falsehood;  he  is  lying 
to  the  public  and  stealing  for  his  goods  a  good  will  and 
credit  to  which  they  are  not  entitled.  This  proposition 
answers  itself  in  the  stating  of  it. 

If  on  the  other  hand,  a  maker  of  canned  vegetables 
puts  a  red  triangle  on  his  canned  tomatoes,  what  then? 
Bass  is  not  injured,  because  the  good  will  which  the 
public  feels  toward  his  goods  is  based  on  past  experience 
with  them;  and  canned  tomatoes  are  a  product  of  such 
a  different  character  that  a  reputation  for  making  good 
ale  would  not  justify  the  assumption  on  the  part  of  the 
buyer,  that  the  tomatoes  also  came  from  Bass. 

ONE  TEST  TO  UNCOVER  UNFAIR  TRADING 

This  situation  suggests  one  of  the  most  difficult  phases 
of  unfair  competition.  When  the  goods  on  which  the 
common  mark  is  used  are  not  the  same,  where  should  the 
line  be  drawn  between  what  is  fair  and  what  is  not?  To 
reconcile  the  decisions  of  the  courts  is  hopeless.  To  de- 
duce a  general  rule  that  will  fit  all  cases  is  impossible. 
With  the  desire  to  secure  to  the  original  user  of  a  mark 
the  good  will  he  has  created  and  not  to  create  a  monopoly 
in  a  name  or  device  which  apart  from  its  function  as  a 
means  of  symbolizing  such  a  good  will  is  not  susceptible 
of  ownership  and  is  valuable  only  as  a  means  of  imparting 
information  as  to  the  commercial  origin  of  goods,  the 
courts  have  found  themselves  confronted  with  a  puzzling 
problem. 

The  best  test  which  can  be  arrived  at  is  this.  Given  a 
reasonably  intelligent  purchaser  at  retail,  who  knows  the 
plaintiff's  mark  and  is  familiar  with  the  goods  sold  under 
it,  let  him  in  the  ordinary  course  of  dealing  see  the  de- 
fendant's goods,  bearing  the  mark,  the  use  of  which  is 
claimed  to  infringe;  what  impression  would  he  be  likely 
to  get  concerning  the  commercial  origin  of  the  defend- 
ant's goods  from  the  use  of  the  mark  upon  them?  If  he 

255 


RESTRAINING     UNFAIR     TRADE 

would  probably  assume  that  they  were  of  the  plaintiff's 
manufacture,  then  the  defendant  infringes. 

The  question  in  these  cases  always  is — is  the  informa- 
tion that  the  mark  gives  truthful?  Take  the  Kodak  case 
as  an  example.  The  English  courts  held  that  a  bicycle 
called  a  Kodak  would  probably  be  acepted  by  the  public 
as  made  by  Eastman.  It  was  not  made  by  Eastman, 
hence  it  implied  a  falsehood,  and  since  it  was  a  false- 
hood that  would,  if  permitted  to  continue,  likely  cause 
injury  to  Eastman,  Eastman  could  stop  it. 

But  a  miller  uses  the  word  "Ivory"  as  a  flour  brand. 
Is  this  an  implied  representation  that  the  flour  is  made 
by  the  makers  of  Ivory  soap?  Would  an  ordinary  buyer 
at  retail  so  conclude?  Probably  not. 

A  judge  of  much  experience  in  these  matters  has  thus 
laid  down  the  rule  in  a  case  where  J.  C.  Eno  Company, 
the  proprietors  of  "Eno's  Fruit  Salt",  which  is  powder 
for  making  an  effervescent  medicinal  drink,  attempted  to 
stop  the  use  of  the  words  "Fruit.  Salt"  by  a  competitor 
upon  baking  powder: 

I  have  no  doubt  that  those  words  are  calculated  to  deceive.  They 
are  calculated,  and  I  think  designed,  to  create  a  confusion  in  the 
minds  of  those  persons  to  whom  Mr.  Dunn's  advertisements  are  ad- 
dressed and  to  lead  the  ordinary  run  of  such  persons  to  suppose 
that  his  baking  powder  is  in  some  way  or  other  connected  with  Mr. 
Eno's  preparation.  The  object  I  think  was,  and  if  Mr.  Dunn's 
application  were  successful,  the  result,  I  am  convinced,  would  be 
in  some  cases  at  any  rate  to  induce  people  to  buy  under  an  im- 
pression "not  founded  in  truth"  and  not,  perhaps  the  less  mis- 
leading because  it  is  vague  and  indefinite,  and,  it  may  be,  incapable 
of  bearing  the  very  slightest  examination. 

It  would  seem  as  if  every  reasonable  doubt  ought  to 
be  resolved  in  favor  of  the  one  whose  efforts  have  made 
the  mark  valuable. 

Use  by  a  new  comer  of  an  established  trade-mark,  even 
if  the  goods  upon  which  he  uses  it  are  not  the  same, 
should  be  stopped  if  the  deception  of  the  public  and  the 
diversion  of  the  good  will  of  the  earlier  user  is  a  probable 
or  even  a  possible  consequence. 


256 


CHAPTER  XXVII 

HOW  PRICE  CUTTING  REACTS 
ON  GOOD  WILL 


NO  attempt  will  be  made  to  discuss  the  desirability  of 
fixing  and  maintaining  by  agreement,  reasonable 
sale  and  resale  prices  of  merchandise  generally,  except 
to  express  the  belief  that  unrestrained  competition  in 
price  alone  can  be  carried  to  a  point  where  no  one  is 
benefited  by  it.  This  subject,  while  of  enormous  economic 
and  social  importance,  has  no  place  in  a  book  devoted  to 
good  will,  trade-marks  and  unfair  trading. 

There  is,  however,  one  aspect  of  price  cutting — ger- 
mane to  these  subjects — which  is  just  now  being  much 
debated — the  cutting  by  dealers,  for  advertising  pur- 
poses, of  the  known  and  established  prices  of  reputable 
articles  bearing  the  trade-mark  or  other  means  of  identi- 
fication of  the  producer. 

Cutting  of  prices  on  advertised  goods  is  a  by-product 
of  advertising. 

The  advertising  to  the  consumer  of  articles  bearing 
trade-marks  or  other  means  of  identification  has  not 
been  approached  scientifically  until  within  comparatively 
recent  years  and  the  trade  conditions  resulting  from 
such  advertising,  except  in  a  few  lines  of  business,  have 
not  been  analyzed. 

National  distribution  is  an  essential  condition  to  make 
national  advertising  effective.  Standardized  and  uniform 
resale  prices  of  nationally  advertised  articles  is  believed 
by  most  national  advertisers  to  be  a  desirable  thing  and 
necessary  to  secure  the  widest  distribution. 

257 


RESTRAINING     UNFAIR     TRADE 

The  producers  of  proprietary  medicines  were  the  first 
to  indulge  in  wide  national  advertising  to  create  con- 
sumer demand,  and  it  was  in  the  drug  trade  that  price 
cutting  first  became  a  serious  problem.  The  so-called 
tripartite  plan  of  the  National  Wholesale  Druggists'  As- 
sociation and  the  National  Association  of  Retail  Drug- 
gists and  certain  proprietary  manufacturers  was  adopted 
in  1900  and  was  one  of  the  earliest  attempts  to  check 
retail  price  cutting,  which  was  believed  to  be  a  serious 
menace  to  legitimate  merchandising.  The  tripartite  plan 
briefly  was  this:  The  Retail  Druggists'  Association  un- 
dertook to  furnish  information  concerning  "aggressive 
cutters",  and  a  list  was  published  which  contained  the 
names  of  druggists  who  were  alleged  to  cut  prices  on 
proprietary  goods,  for  the  benefit  of  the  manufacturers 
and  jobbers  who  might,  if  they  chose,  refrain  from  sell- 
ing such  goods  to  them.  This  plan  in  its  operation  was 
regarded  by  the  government  as  objectional  under  the 
Sherman  Law  and  was  stopped. 

EFFECTS  OF  PRICE  CUTTING  ON  PRODUCTION 

Since  1900  several  plans  of  varying  degrees  of  com- 
pleteness and  ingenuity  have  been  devised,  having  as 
their  purpose  the  suppression  of  the  cutting  of  standard 
prices  of  advertised  articles.  All  of  these  plans  have 
proceeded  upon  the  postulate  that  such  price  cutting  is 
injurious  to  the  producer  and  advertiser  of  such  article. 

The  producers  were  interested  in  the  question  because 
they  felt  that  while  the  cutting  of  prices  on  their  goods 
might  stimulate  a  temporary  demand  for  them,  in  the 
long  run  they  were  bound  to  suffer.  The  wholesale  and 
retail  trade  felt  that  the  cutting  of  established  prices 
bred  a  destructive  competition  among  themselves,  depend- 
ent not  upon  service,  but  upon  cheapness,  and  deprived 
them  of  the  profits  to  which  they  were  legitimately  en- 
titled. They  argued  that  it  was  beneficial  to  the  com- 
munity as  well  as  important  to  themselves,  that  they  re- 
main in  business.  To  remain  in  business  they  had  to 

258 


HOW     PRICE     CUTTING     HURTS     GOOD     WILL 

make  a  profit.  If  they  were  compelled  to  meet  cut  prices 
made  by  such  of  their  competitors  as  were  willing  to  sac- 
rifice ultimate  survival  to  immediate  gain,  profits  would 
be  destroyed  and  extinction  was  only  a  matter  of  time. 

The  retail  distributors  found  that  if  one  of  their  num- 
ber in  any  locality  started  a  cut  rate  war  on  an  adver- 
tised product,  they,  the  other  members  of  the  trading 
community  in  that  locality  would  be  unable  to  sell  the 
article  at  the  standard  price.  They  were  unwilling  to 
meet  the  cut,  because  profits  would  be  sacrificed.  If  they 
did  meet  the  cut  price  or  retaliated  by  cutting  still  lower 
the  goods  were  handled  at  a  loss,  which  meant  that  soon 
they  were  not  handled  at  all. 

The  public  is  vitally  affected  because  indiscriminate 
and  continued  price  cutting  results  in  restricting  the  dis- 
tribution of  the  goods  whose  price  is  cut  and  to  their  ulti- 
mate elimination  from  particular  markets.  If  it  is  de- 
sirable for  the  public  to  have  the  goods,  then  whatever 
restricts  their  distribution  and  makes  them  harder  to  get 
is  not  to  the  public  interest. 

Price  cutting  is  also  a  potent  factor  in  promoting  sub- 
stitution. 

When  an  article,  as  the  result  of  a  cut  price  war,  can 
only  be  sold  at  a  loss,  where  a  purchaser  demands  the 
article  a  dealer  has  three  courses  open  to  him — to  furnish 
the  article  demanded  and  lose  money;  to  say  he  hasn't 
it  and  lose  a  customer,  or  to  offer  something  "just  as 
good"  and  make  a  profit.  The  presence  of  a  customer  in 
a  store  with  money  in  his  hand  ready  to  buy  is  worth 
something;  if  he  is  permitted  to  escape  without  buying 
he  represents  a  dead  loss.  If  the  customer  will  permit 
himself  to  be  persuaded  to  buy  the  profitable  substitute 
offered,  the  dealer  is  satisfied,  but  the  purchaser  has  been 
compelled  to  accept  the  dealer's  guaranty  of  the  excel- 
lence of  the  article  sold,  instead  of  the  producer's  guar- 
anty represented  by  his  trade-mark  on  the  article  which 
he  expected  to  buy  when  he  entered  the  store.  This  sort 
of  substitution  is  essentially  unfair  to  the  producer  of 
the  advertised  goods  and  to  the  consumer,  and  benefits 

259 


RESTRAINING     UNFAIR     TRADE 

nobody  but  the  dealer.  Many  do  not  content  themselves 
with  persuasion,  but  sometimes  pass  off  without  explana- 
tion a  substitute  for  the  called-for  goods,  trusting  to  the 
known  carelessness  and  good  nature  of  the  public  not  to 
detect,  or  if  detecting,  not  to  resent,  the  imposition. 

The  direct  injury  to  the  consumer  resulting  from  this 
sort  of  merchandising  is  evident.  It  has  in  addition  a 
demoralizing  effect  on  both  the  public  and  the  dealer;  it 
engenders  a  mutual  distrust  which  is  deplorable  and  is  a 
reversion  to  the  methods  of  a  time  when  caveat  emptor 
was  a  principle  of  universal  application.  Any  man  went 
into  a  store  then  at  his  peril — expecting  to  be  swindled 
unless  he  could  beat  the  dealer  in  a  battle  of  wits. 

HOW  FAR  SHALL  RETAIL  PRICES  BE  STANDARDIZED  ? 

Standardizing  retail  prices  is  a  thing  of  great  com- 
plexity. It  involves  the  consideration  of  advertising  as 
an  economic  factor;  the  distribution  of  the  advertised 
merchandise;  the  desirability  of  keeping  the  channels  of 
trade  unclogged  and  unobstructed. 

The  question  is  whether  it  is  to  the  benefit  of  the  pro- 
ducer, the  distributor  and  the  public  to  have  wide  distri- 
bution of  such  goods  or  instead,  to  have  distribution 
through  fewer  channels  and  in  perhaps  larger  quantities. 
The  standardization  of  prices  has  as  a  background  the 
whole  field  of  distribution.  The  desirability  of  standard- 
izing resale  prices  is  an  economic  problem  to  be  investi- 
gated in  an  unprejudiced  and  non-partisan  way.  The 
facts  must  be  ascertained,  collated  and  studied,  and  this 
is  a  problem  for  the  investigator,  the  statistician  and  the 
economist.  The  Federal  Bureau  of  Corporations  has  had 
in  progress  such  an  investigation. 

If  the  standardization  of  prices  and  maintenance  of 
resale  prices  is  sound  economically  it  will  survive  and  the 
law  will  ultimately  conform  to  the  economic  necessity,  be- 
cause law  is  nothing  but  crystallizing  public  opinion.  The 
economic  theory  which  seems  now  to  be  accepted  by 
legislators  and  the  courts,  is  that  unrestrained  competi- 

260 


HOW     PRICE     CUTTING     HURTS     GOOD     WILL 

tion  in  prices  is  a  desirable  thing.  It  is  only  recently 
that  this  idea  has  been  seriously  questioned.  Standard- 
izing of  sale  and  resale  prices  prevents  this  unrestrained 
price  competition  in  the  same  article,  and,  therefore,  at 
the  outset  collides  with  the  judicially  and  legally  accepted 
economic  theory. 

If  the  standardization  of  sale  and  resale  prices  is  eco- 
nomically unsound  and  can  be  demonstrated  to  be  eco- 
nomically unsound  and  prejudicial  to  the  true  public 
interest,  it  cannot  survive,  because  the  commodities  which 
are  the  subject  of  price  cutting,  and  in  the  sale  of  which 
it  is  worth  anybody's  while  to  disregard  standardized 
prices  and  sell  for  less,  are  those  which  are  advertised, 
which  are  identified  by  trade-marks  or  other  means  as 
the  goods  of  a  certain  producer.  The  continued  sale  of 
such  articles  is  dependent  upon  the  public  good  will 
toward  them. 

If  the  sale  of  such  articles  at  standardized  prices  is 
known  or  believed  to  be  prejudicial  to  the  public  interest, 
the  minute  the  public  (slow  moving  as  it  is)  finds  out 
about  it,  as  it  is  bound  to  do  if  the  results  of  the  investi- 
gation are  published,  as  they  will  be,  its  good  will  toward 
the  article  will  be  alienated  and  ill  will  substituted,  and  no 
article,  the  sale  of  which  depends  upon  public  good  will, 
will  face  such  conditions. 

The  right  solution  of  the  standardized  price  problem 
is  dependent  upon  ascertainment  and  publication  of  the 
economic  facts  in  regard  to  it.  If  it  is  a  good  thing,  eco- 
nomically, for  the  producer,  the  dealer  and  the  public,  it 
is  bound  to  be  permitted  and  sanctioned  by  public  opinion ; 
and  the  law,  either  by  statutory  enactment  or  judicial 
construction,  will  follow  public  opinion.  If  it  is  not  a 
good  thing  economically  for  the  public,  and  that  fact 
becomes  known  to  the  public,  it  will  not  be  permitted  and 
all  efforts  to  accomplish  it  are  bound  to  fail,  because  if 
the  courts  will  not  construe  existing  laws  to  conform  to 
public  opinion,  the  legislatures  will  enact  new  laws  of 
express  prohibition.  It  all  gets  back  to  the  question  of 
public  opinion,  and  public  opinion  is  formed  and  guided 

261 


RESTRAINING     UNFAIR     TRADE 

by  knowledge  of  facts  and  conditions. 

At  present  it  must  be  said  that  the  Supreme  Court 
has,  in  every  instance  where  the  matter  has  been  pre- 
sented, condemned  all  efforts  to  maintain  resale  prices, 
whether  accomplished  by  contract  or  by  licenses  under 
patents  or  copyrights. 

Briefly,  the  following  plans  to  control  resale  prices 
have  been  held  to  be  unlawful  or  at  least  unenforceable: 

(1)  The  publication  by  trade  associations  of  lists  con- 
taining the  names  of  aggressive  cutters. 

(2)  The  so-called  direct  contract  plan,  as  it  was  for- 
merly operated,  which  involved  a  contract  of  sale  by  a  pro- 
ducer to  a  jobber  by  which  the  jobber  agreed  in  consid- 
eration of  being  supplied  with  the  producer's  goods  to 
sell  only  at  certain  prices  and  only  to  such  retail  dealers 
as  were  designated  by  the  producer.    The  producer  desig- 
nated such  retailers  as  made  contracts  with  him  to  main- 
tain a  standard  retail  price. 

In  one  line  of  cases,  the  contract  with  the  jobber  was 
one  of  consignment  and  that  between  the  jobber  and  the 
retailer  one  of  sale.  Both  were  held  in  restraint  of  trade. 

RESTRICTIONS  THAT  DID  NOT  STAND  THE  TEST  OF  LAW 

The  patent  license  cases  arose  out  of  disregard  by  a 
retailer  who  had  bought  the  goods  from  a  jobber,  who 
in  turn  had  bought  from  the  patentee  or  his  licensee,  of 
a  notice  that  the  use  or  sale  of  the  patented  article  was 
licensed  only  on  condition  that  a  stated  retail  price  was 
paid.  The  license  was  held  unenforceable  under  the  patent 
laws.  In  the  cases  which  were  brought  under  the  copy- 
right law,  the  books  contained  a  notice  that  sale  at  less 
than  a  price  named  would  constitute  infringement  of 
the  copyright.  This  restriction  was  also  held  unenforce- 
able. 

These  decisions  probably  reflected  the  almost  universal 
unfavorable  public  opinion  which  existed  throughout  the 
country  at  the  time  they  were  rendered.  No  one  can  say 
whether  the  decisions  were  based  upon  the  assumed  un- 

262 


HOW  PRICE  CUTTING  HURTS  GOOD  WILL 

lawfulness  of  the  means  used  in  the  particular  cases  to 
control  resale  prices,  or  whether  it  was  the  controlling 
resale  prices,  as  a  thing  in  itself,  which  was  condemned. 

If  the  establishment  of  resale  prices  is  unlawful  in 
itself,  it  is  of  no  consequence  that  lawful  means  are 
adopted  to  accomplish  it. 

Whether  or  not  the  standardization  of  prices  and  the 
establishment  of  resale  prices  is  economicaly  sound,  it  is 
evident  that  from  the  standpoint  of  the  producer  the  cut- 
ting of  known  and  established  prices  works  an  injury  to 
him,  and  it  is  believed  that  the  law  of  unfair  competition 
should  be  elastic  enough  to  restrain  such  assaults  on  busi- 
ness good  will  by  analogy  to  established  principles. 

In  the  cases  enjoining  trade-mark  infringement  and 
unfair  competition  in  its  commonly  accepted  sense,  the 
theory  is  that  everyone  is  entitled  to  the  first  reward 
of  his  honesty,  skill  or  enterprise.  If  his  product  is 
preferred  by  purchasers  to  the  goods  of  others,  he  has 
a  right  to  every  benefit  which  ensues  from  that  fact,  and 
by  a  trade-mark  or  otherwise,  visibly  to  symbolize  and 
perpetuate  his  reputation.  The  good  will  which  he  has 
created  belongs  to  him  alone.  Attempts  by  others  to 
divert  it  to  themselves  are  wrongful. 

It  is  a  fair  deduction  from  the  decisions  that  it  is  the 
damage  to  the  plaintiff's  good  will  and  not  the  defrauding 
of  his  customers  which  is  the  foundation  of  the  right  of 
action  in  trade-mark  infringement  and  unfair  competi- 
tion cases.  Mere  deception  of  the  public  is  not  a  ground 
for  private  action.  "Somebody,"  said  Lord  Justice  James, 
"has  a  right  to  say  'You  must  not  use  a  name,  whether 
fictitious  or  real,  or  a  description,  whether  true  or  not, 
which  is  intended  to  represent,  or  calculated  to  repre- 
sent to  the  world  that  your  business  is  my  business,  and 
therefore  deprive  me  by  a  fraudulent  misstatement  of 
yours  from  the  profits  of  the  business  which  would  other- 
wise come  to  me'.  That  is  the  sole  principle  on  which 
the  court  interferes — for  the  purpose  of  protecting  the 
owner  of  a  trade  or  business  from  a  fraudulent  invasion 
of  that  business  by  somebody  else.  It  does  not  interfere 

263 


RESTRAINING     UNFAIR     TRADE 

to  prevent  the  world  outside  from  being  misled  into  any- 
thing." Of  course  fraud  does  not  necessarily  mean  in- 
tentional fraud.  The  element  of  actual  fraud  has  long 
ceased  to  be  important.  While  it  has  frequently  been 
said  that  fraud  is  the  essence  of  unfair  competition,  this 
can  mean  no  more  than  constructive  fraud.  Here,  as 
elsewhere,  men  are  presumed  to  intend  the  natural  con- 
sequences of  their  acts.  The  act,  however  innocent,  is 
considered  constructively  fraudulent  if  the  result  would 
tend  to  unfair  trade,  to  confusion  of  goods  and  to  inter- 
ference with  the  rights  of  another. 

That  a  trader  cannot  be  legally  injured  in  his  busi- 
ness good  will,  except  by  the  stealing  away  of  his  cus- 
tomers from  him  by  deceit,  cannot  be  the  law.  It  is  the 
damage  to  good  will,  not  the  manner  of  it,  which  is  im- 
portant. 

PRICE  CUTTING  ANALYZED 

Depriving  the  business  proprietor  of  his  customers  by 
deceiving  them  is  only  one  method  of  unnecessarily  injur- 
ing a  man  in  his  good  will.  Other  conduct  on  the  part 
of  one  trader  not  involving  deception  of  the  public,  if  it 
results  in  unnecessary  damage  to  the  business  of  another 
and  jeopardizes  his  good  will,  ought  as  well  to  be  capable 
of  redress.  It  would  seem  as  if  relief  should  depend  not 
on  the  element  of  public  deception,  but  upon  the  answer 
to  the  query:  Is  a  business  or  good  will  being  diverted 
from  one  who  has  created  it,  to  his  injury  and  to  the 
benefit  of  the  parasite?  If  it  is  being  taken  away  so 
that  its  value  to  its  creator  is  sensibly  diminished,  why 
should  he  not  have  redress?  Why  make  sneak  thievery 
a  crime  and  legalize  highway  robbery? 

Take  a  common  case  of  price  cutting.  An  article  of 
recognized  merit  has  an  established  retail  price  fixed  by 
the  producer  of  it.  It  is  extensively  advertised.  The 
price  is  known.  It  is  a  reasonable  price  or  at  least  is 
believed  to  be  by  the  public,  else  it  would  not  be  paid. 
Under  modern  trade  and  advertising  conditions  articles 

264 


HOW     PRICE     CUTTING     HURTS     GOOD     WILL 

must  be  nationally  distributed.  They  must  be  in  the 
hands  of  as  many  retail  dealers  as  possible.  The  effect 
of  an  advertisement  of  a  particular  article  is  not  lasting. 
It  creates  an  immediate  impulse  to  buy  or  it  is  of  little 
use.  To  have  a  return  on  advertising  expenditure,  the 
purchaser  must  be  able  to  obey  the  impulse  while  he  has 
it.  It  must  not  be  permitted  to  wear  off.  The  price 
of  the  article  is  usually  stated  so  that  the  reader  of  the 
advertisement  may  know  that  it  is  within  his  means, 
but,  most  important  of  all,  while  he  is  in  the  notion  he 
must  be  able  to  buy  the  thing  conveniently  at  the  time 
he  wants  it.  He  must  be  made  to  feel  that  he  can  get 
it  at  one  place  as  cheaply  as  another,  otherwise  he  will 
shop  around  for  a  bargain,  and  in  the  meantime  he  for- 
gets ;  the  impulse  to  buy  that  particular  article  has 
evaporated.  Therefore,  with  national  advertising,  gen- 
eral distribution  and  uniform  prices  are  indispensable. 
The  retail  dealer  in  such  an  article  need  make  little  effort 
to  sell  it.  It  sells  itself.  The  producer's  advertising 
sends  purchasers  to  his  store.  The  established  price 
guarantees  a  profit  on  the  average  turnover. 

After  the  reputation  and  popularity  of  a  nationally 
advertised  and  thoroughly  distributed  article  are  estab- 
lished, everyone  who  knows  the  article  probably  knows  its 
retail  price.  The  consumer  knows  it  as  well  as  he  knows 
the  price  of  a  dollar  bill.  A  retail  dealer  then,  for  the 
purpose  of  attracting  custom  to  himself,  advertises  and 
sells  the  article  at  a  price  conspicuously  lower  than  the 
established  and  recognized  price.  He  offers  an  obvious 
bargain.  Frequently  this  price  is  cost  or  below,  the  ex- 
pectation being  that  any  direct  loss  sustained  will  more 
than  be  made  up  by  the  value  of  the  advertising  received 
and  in  the  sale  at  enhanced  prices  of  other  articles  whose 
prices  are  not  known. 

The  advertisement  by  a  department  store  of  Big  Ben 
clocks  which  everybody  knows  are  universally  sold  at 
two  dollars  and  a  half,  at  a  cut  price  of  one  dollar  and 
ninety-eight  cents  gives  verisimilitude  to  the  statement 
which  immediately  follows  in  the  same  advertisement  that 

265 


RESTRAINING     UNFAIR     TRADE 

thirty  dollar  suits  are  being  sold  at  thirteen  sixty-nine. 
A  dealer,  for  example,  can  well  afford  to  sell  for  sixty- 
nine  cents  a  watch  which  is  advertised  by  its  producer 
as  a  dollar  watch,  and  which  everyone  else  in  his  town 
sells  at  a  dollar,  if  he  can  sell  with  it  for  a  dollar,  a  fifty 
cent  chain  or  give  to  the  public  the  impression  that  he 
sells  everything  he  deals  in  thirty-one  per  cent 
cheaper  than  anyone  else.  People  buy,  not  because  a 
watch  is  advertised  at  sixty-nine  cents,  but  because  a 
particular  watch  under  a  well  known  trade-mark,  which 
is  known  to  be  universally  sold  at  a  dollar  and  believed 
to  be  worth  it,  is  offered  by  this  particular  dealer  at 
a  price  which  is  less  than  anyone  else  charges.  In  short, 
it  is  the  utilization  by  the  dealer  of  the  good  will  of  the 
producer  that  makes  the  situation  possible  at  all.  It 
is  the  localized  good  will  of  the  producer  in  the  com- 
munity in  which  the  retailer  does  business  that  makes 
cutting  of  prices  on  the  producer's  goods  worth  while. 
It  is  the  knowledge  of  the  public  that  the  producer's  goods 
are  reputable  and  have  the  value  which  the  producer  has 
set  upon  them,  by  fixing  the  price,  that  makes  their  sale 
at  cut  prices  attractive. 

One  cut  price  sale  invariably  provokes  others  in  re- 
taliation. Where  one  dealer  cuts  the  price  of  a  dollar 
watch  to  sixty-nine  cents,  his  neighbor,  not  to  be  out- 
done, advertises  it  at  fifty-nine  cents.  Another  then  cuts 
to  less,  with  the  result  that  sooner  or  later  all  the  dealers 
in  the  community  are  forced  to  sell  this  particular  watch 
at  a  price  which  yields  no  profit.  The  result  is  that  pur- 
chasers are  persuaded  not  to  buy,  or  to  take  an  unknown 
article  represented  to  be  "just  as  good".  The  reputable 
and  popular  article  is  sold  under  protest  or  not  at  all. 
The  local  shop  which  survives  this  barbarous  competition 
is  invariably  a  department  store,  or  other  concern  of 
large  resources,  which  can  afford  to  do  a  part  of  its 
business  for  a  time  at  a  loss. 

The  effect  of  a  cut  rate  war  on  the  producer,  whose 
well  advertised  and  reputable  product  was  the  subject  of 
the  first  attack,  is  disastrous.  Through  no  fault  of  his 

266 


HOW     PRICE     CUTTING     HURTS     GOOD     WILL 

own  he  is  deprived  of  the  distribution  of  his  goods  in  the 
community.  His  market  is  taken  away  from  him  for 
no  reasons  except  that  his  reputation  is  good  and  his 
products  are  in  demand,  of  recognized  value  and  known  to 
be  worth  the  price  he  asks.  His  advertising  expenditure 
is  wasted  because  ineffective.  Purchasers  with  the  impulse 
to  buy  cannot  gratify  it,  and  it  is  manifest  that  such 
conditions,  if  at  all  extensive,  will  ruin  any  business. 

The  public  is  not  benefited  because,  even  if  for  a  while 
they  are  able  to  get  an  article  of  recognized  value  at  a 
cut  price,  soon  they  cannot  get  it  at  all,  or  only  at  great 
inconvenience. 

There  is  another  very  real  element  of  danger  arising 
out  of  such  conditions.  The  article  which  is  the  victim 
of  the  slaughter  is  of  known  value,  its  price  is  marked 
on  the  package.  It  weakens  public  confidence  in  the 
thing  to  have  it  hawked  about  at  unstable  prices. 

When  an  article  the  price  of  which  is  announced  upon 
it  is  a  dollar,  is  sold  at  sixty-nine  cents,  it  becomes  a 
sixty-nine  cent  article.  The  public  does  not  analyze  the 
situation  and  cannot  be  made  to  believe  that  the  dealers 
in  selling  at  sixty-nine  cents  are  losing  money  on  every 
sale.  People  jump  to  the  conclusion  that  the  article  the 
price  of  which  is  advertised  as  a  dollar  is  not  worth  it 
and  that  dealers  who  charge  a  dollar  are  getting  an  exces- 
sive profit. 

SPECIFIC  INJURIES  INFLICTED  ON  GOOD  WILL  BY  PRICE  CUTTING 

The  dealers  who  cut  prices  in  this  way  may  roughly 
be  divided  into  two  classes.  First  are  those  who  do  it 
deliberately  for  advertising  purposes  and  charge  the  loss 
to  advertising  exactly  as  they  charge  the  cost  of  news- 
paper advertising.  In  this  event  it  is  a  part  of  the  over- 
head expense  of  the  business,  for  which,  of  course,  the 
public  pays.  The  second  class  is  unfortunately  numerous 
enough.  It  is  made  up  of  those  dealers  who  have  no  sys- 
tem of  figuring  costs,  who  do  not  know  what  it  costs 
them  to  do  business,  who  honestly  think  that  they  can 

267 


RESTRAINING     UNFAIR     TRADE 

sell  an  article  for  which  they  pay  seventy  cents  at  eighty- 
five  and  not  lose  money. 

In  whichever  class  the  price  cutter  belongs,  the  per- 
sistent cutting  of  prices  on  goods  of  known  value  is 
ruinous  to  the  producer  of  them  because  it  restricts  his 
distribution.  It  tends  to  concentrate  the  sale  of  his  goods 
in  the  hands  of  department  and  chain  stores  and  take 
them  out  of  the  hands  of  the  small  dealer,  who,  of  course, 
will  not  handle  them  because  he  cannot  sell  at  the  estab- 
lished price  in  the  face  of  cut  price  competition  and  will 
not  at  the  prevailing  cut  price  because  they  yield  him 
no  profit.  The  result  is  that  distribution  is  seriously 
hampered  if  not  destroyed.  The  goods  are  cheapened 
in  the  public  estimation  on  account  of  the  fluctuating 
price,  like  a  depreciated  currency.  Their  reputation 
is  damaged  and  the  producer's  reputation  as  a  fair  deal- 
ing man  is  questioned,  because  he  is  accused  of  fixing 
an  excessive  price  at  the  outset.  No  one  will  believe  the 
fact  that  dealejrs  in  cutting  prices  lose  money  on  the  par- 
ticular article  whose  price  js  cut. 

The  first  step  in  this  progress  of  destruction  is  the 
utilization,  without  permission,  of  the  producer's  good 
will  for  another's  private  gain,  resulting  in  damage.  The 
result  is  the  same  as  if  the  producer's  good  will  were 
taken  away  from  him  by  fraud.  The  effect  is  the  same 
as  it  would  be  if  the  element  of  deception,  as  in  ordinary 
cases  of  unfair  competition,  were  present. 

The  law  of  unfair  competition  has  been  extended  in 
the  last  twenty  years  to  include  the  suppression  of  all 
deceptive  artifices  by  which  one  trader's  customers  are 
taken  away  from  him  and  transferred  to  another.  The 
element  of  deception  cannot  be  the  sole  consideration. 
The  real  injury  and  the  only  thing  which  gives  a  private 
right  of  action  is  the  damage  to  the  business  good  will 
of  the  original  trader  and  its  unlicensed  utilization  by 
a  competitor  to  his  own  advantage. 

In  view  of  the  recent  decisions  of  the  Supreme  Court 
it  must  of  course  be  admitted  that  maintaining  resale 
prices,  except  perhaps  in  cases  of  agency  or  consign- 

268 


HOW     PRICE     CUTTING     HURTS     GOOD     WILL 

ment,  cannot  be  accomplished  by  contracts  or  by  licenses 
under  patents  or  copyrights,  if  title  to  the  article  is 
parted  with.  The  essence  of  the  situation  here  under 
discussion  is  not  the  propriety,  legality  or  necessity  of 
fixing  resale  prices.  It  is  in  the  doing  of  an  act  calcu- 
lated to  injure  and  resulting  in  injury  with  respect  to 
that  most  subtle  of  property  rights,  business  good  will. 
That  such  conduct  is  felt  to  be  a  real  menace  is  shown 
by  the  fact  that  in  at  least  two  widely  separated  local- 
ities it  has  been  made  the  subject  of  statutory  prohibi- 
tion. There  is  a  section  of  the  Danish  statute  dealing 
with  illegal  marking  of  goods  and  unfair  trading  which 
expressly  forbids  price  cutting,  and  a  recent  New  Jersey 
statute  is  broad  enough  to  cover  it. 

THE  VIEWPOINT  OF  THE  LAW 

The  opponents  of  efforts  to  maintain  resale  prices  in- 
variably contend  that  where  an  article  is  purchased,  title 
passes  and  control  over  it  by  the  seller  is  gone;  that  it 
is  the  property  of  the  purchasing  dealer  to  do  with  as 
he  pleases.  This  has  long  been  the  favorite  argument  of 
those  who  justify  the  perpetration  of  unfair  trading  by 
the  use  of  personal  names  or  by  the  deceptive  use  of 
other  devices  in  which  no  exclusive  right  can  be  main- 
tained. A  man's  name  is  undeniably  his  own  property, 
but  he  is  not  permitted  to  use  his  own  property,  whether 
it  be  his  personal  name,  or  anything  else  he  may  own, 
in  such  a  way  as  unnecessarily  to  cause  damage  to  his 
neighbor.  Ownership  is  not  a  license  to  injure  another. 
Sixteen  String  Jack,  whose  operations  on  Houndslow 
Heath  have  made  him  immortal,  doubtless  owned  the  black 
mask  and  pistol  which  were  the  necessary  tools  of  his 
trade.  A  man  with  his  own  rifle  may  lawfully  shoot  at 
a  target.  He  ought  not  in  all  conscience,  however,  to 
be  permitted  to  pot  his  neighbors  and  defend  on  the 
ground  that  he  owns  the  gun. 

It  may  be  objected  that  relief  against  injurious  price 
cutting  would  be  novel.  All  the  law  of  unfair  competi- 

269 


RESTRAINING     UNFAIR     TRADE 

tion  was  novel,  not  so  many  years  ago.  Because  a  notion 
is  new  it  is  not  necessarily  unsound.  It  has  always  been 
the  boast  of  courts  of  equity  that  they  adjust  themselves 
to  modern  instances,  and  as  new  wrongs  develop,  new 
remedies  will  be  applied  or  old  remedies  will  be  enlarged 
to  meet  the  changed  conditions.  As  a  distinguished  judge 
recently  observed: 

It  must  be  remembered  that  the  common  law  is  the  result  of 
growth,  and  that  its  development  has  been  determined  by  the  social 
needs  of  the  community  which  it  governs.  It  is  the  resultant  of 
conflicting  social  forces,  and  those  forces  which  are  for  the  time 
dominant  leave  their  impress  upon  the  law.  It  is  of  judicial 
origin,  and  seeks  to  establish  doctrines  and  rules  for  the  determina- 
tion, protection  and  enforcement  of  legal  rights.  Manifestly  it 
must  change  as  society  changes  and  new  rights  are  recognized.  To 
be  an  efficient  instrument,  and  not  a  mere  abstraction,  it  must 
gradually  adapt  itself  to  changed  conditions.  Necessarily  its  form 
and  substance  have  been  greatly  affected  by  prevalent  economic 
theories.  For  generations  there  has  been  a  practical  agreement 
upon  the  proposition  that  competition  in  trade  and  business  is  de- 
sirable, and  this  idea  has  found  expression  in  the  decisions  of  the 
courts  as  well  as  in  statutes.  But  it  has  led  to  grievous  and  mani- 
fold wrongs  to  individuals,  and  many  courts  have  manifested  an 
earnest  desire  to  protect  the  individuals  from  the  evils  which  re- 
sult from  unrestrained  business  competition.  The  problem  has 
been  so  to  adjust  matters  as  to  preserve  the  principle  of  com- 
petition, and  yet  guard  against  its  abuse  to  the  unnecessary  injury 
to  the  individual.  So  the  principle  that  a  man  may  use  his  own 
property  according  to  his  own  needs  and  desires,  while  true  in  the 
abstract,  is  subject  to  many  limitations  in  the  concrete.  Men  can- 
hot  always,  in  civilized  society,  be  allowed  to  use  their  own  property 
as  their  interests  or  desires  may  dictate,  without  reference  to  the 
fact  that  they  have  neighbors  whose  rights  are  as  sacred  as  their 
own.  The  existence  and  well  being  of  society  requires  that  each 
and  every  person  shall  conduct  himself  consistently  with  the  fact 
that  he  is  a  social  and  reasonable  person. 


270 


CHAPTER  XXVIII 

THE  RACE  BETWEEN  THE  UN- 
FAIR TRADER  AND  THE  LAW 


THE  principles    *    *    *    apply  to  all  cases  where  fraud  is  prac- 
ticed by  one  in  securing  the  trade  of  a  rival  dealer;  and  these 
ways  are  as  many  and  various  as  the  ingenuity  of  the  dishonest 
schemer  can  invent.     *     *     *    The  fact  that  the  question  comes  to  us 
in  an  entirely  new  guise,  and  that  the  schemer  has  concocted  a  kind  of 
deception  heretofore  unheard  of  in  legal  jurisprudence,  is  no  reason 
why  equity  is  either  unable  or  unwilling  to  deal  with  him.     (Judge 
GARROUTE   in  Weinstock,   Lubin  &  Co.  v.  Marks,   109  Cal.  529,  42 
Pac.   142.) 

The  trade-mark  pirate  of  not  so  very  many  years  ago 
pursued  his  calling  in  as  rude  a  fashion  as  his  colleague 
who  followed  his  trade  upon  the  highway  with  mask  and 
pistols  or  the  deep  sea  variety  whose  place  of  business 
was  along  the  Spanish  main  and  whose  tools  were  board- 
ing pike  and  cutlass.  There  are  few  refinements  in  the 
methods  of  any  of  them.  Jerry  Avershaw  without  apology 
and  circumlocution  robbed  his  victims  at  the  muzzle  of 
a  pistol.  Blackboard  laid  himself  alongside  and  looted. 
Their  commercial  analogues  were  equally  frank  about 
their  depredations.  They  boldly  counterfeited  labels  and 
trade-marks.  Such  a  thing  as  crafty  simulation  was  re- 
garded as  unprofessional  and  boys'  work — like  picking 
pockets. 

There  doubtless  was  trade-mark  piracy  in  England  in 
the  Middle  Ages,  as  in  other  countries,  and  perhaps  a 
search  through  the  year  books  and  the  proceedings  of 
the  Livery  Companies  would  disclose  the  fact,  but  the 
first  case  to  get  into  the  reports  was  in  the  time  of 

271 


RESTRAINING     UNFAIR     TRADE 

James  I  and  this  was  probably  a  common  law  action  for 
deceit  brought  by  the  defrauded  purchaser.  No  other 
case  seems  to  have  got  into  the  books  until  1742.  In  the 
century  between -1742  and  1842  there  was  a  remarkable 
development  of  the  judicial  conscience.  In  1742  Lord 
Hardwicke  when  asked  to  enjoin  one  trader  from  using 
a  mark  previously  appropriated  by  '  another,  declined, 
saying: 

In  the  first  place,  the  motion  is  to  restrain  the  defendant  from 
making  cards  with  the  same  mark,  which  the  plaintiff  has  appro- 
priated to  himself. 

And  in  this  respect,  there  is  no  foundation  for  this  court  to  grant 
such  an  injunction. 

Every  particular  trader  has  some  particular  mark  or  stamp;  but 
I  do  not  know  any  instance  of  granting  an  injunction  here,  to  re- 
strain one  trader  from  using  the  same  mark  with  another  and  I 
think  it  would  be  of  mischievous  consequence  to  do  it. 

An  objection  has  been  made,  that  the  defendant,  in  using  this 
mark,  prejudices  the  plaintiff  by  taking  away  his  customers. 

But  there  is  no  more  weight  in  this,  than  there  would  be  in  an 
objection  to  one  innkeeper,  setting  up  the  same  sign  with  another. 

In  1842,  in  a  case  where  the  proprietor  of  "Perry's 
Medicated  Mexican  Balm"  sued  a  rival  producer  of  a 
similar  article  to  restrain  the  use  of  an  imitated  label, 
Lord  Langdale  said: 

I  think  that  the  principle  on  which  the  courts  both  of  law  and  of 
equity  proceed,  in  granting  relief  and  protection  in  cases  of  this 
sort,  is  very  well  understood.  A  man  is  not  to  sell  his  own  goods 
under  the  pretense  that  they  are  the  goods  of  another  man;  he  can- 
not be  permitted  to  practice  such  a  deception,  nor  to  use  the  means 
which  contribute  to  that  end.  He  cannot,  therefore,  be  allowed  to 
use  names,  marks,  letters,  or  other  indicia,  by  which  he  may  induce 
purchasers  to  believe  that  the  goods  which  he  is  selling  are  the 
manufacture  of  another  person.  I  own  it  does  not  seem  to  me  that 
a  man  can  acquire  a  property  merely  in  a  name  or  mark;  but 
whether  he  has  or  not  a  property  in  the  name  or  mark,  I  have  no 
doubt  that  another  person  has  not  a  right  to  use  that  name  or  mark 
for  the  purposes  of  deception,  and  in  order  to  attract  to  himself 
that  course  of  trade,  or  that  custom  which,  without  that  improper 
act,  would  have  flowed  to  the  person  who  first  used,  or  was  alone 
in  the  habit  of  using,  the  particular  name  or  mark. 

And  in  the  following  year  the  same  judge  in  a  similar 
case  remarked: 

272 


THE     ESSENCE     OF      INFRINGEMENT 

It  has  been  very  correctly  said  that  the  principle  in  these  cases 
is  this  —  that  no  man  has  a  right  to  sell  his  own  goods  as  the  goods 
of  another.  You  may  express  the  same  principle  in  a  different 
form,  and  say  that  no  man  has  a  right  to  dress  himself  in  colors, 
or  adopt  and  bear  symbols,  to  which  he  has  no  peculiar  or  exclusive 
right,  and  thereby  personate  another  person,  for'  the  purpose  of  in- 
ducing the  public  to  suppose,  either  that  he  is  that  other  person, 
or  that  he  is  connected  with  and  selling  the  manufacture  of  such 
other  person,  while  he-  is  really  selling  his  own.  It  is  perfectly 
manifest  that  to  do  these  things  is  to  commit  a  fraud,  and  a  very 
gross  fraud. 

The  rule  of  law  thus  announced  by  Lord  Langdale 
is  unquestionably  sound,  but  he  was  years  in  advance 
of  his  time.  It  was  not  fully  accepted  until  1896 
that  the  rule  is  perfectly  general  and  without  excep- 
tion —  that  no  one  has  a  right  to  represent  his  goods  as 
the  goods  of  another.  This  is  the  present  state  of  the  law. 

The  means  adopted  in  particular  cases  are  not  im- 
portant. Any  contrivance,  however  subtle  or  ingenious, 
which  involves  the  false  representation  that  one  trader's 
goods  are  another's  is  unlawful.  It  is  a  question  of  fact 
in  each  case  whether  or  not  the  false  representation  is 
being  made,  but  if  it  is  being  made  the  legal  consequences 
follow  and  the  use  of  the  efficient  means  of  deception, 
whatever  it  may  be,  is  enjoined  or  restricted  in  such  a 
way  as  to  prevent  the  accomplishment  of  the  deception. 

It  took  a  long  time  and  much  labor  to  arrive  at  this 
conclusion.  The  courts  did  not  hesitate  to  deal  sum- 
marily with  the  counterfeiter  of  labels,  or  technical  trade- 
marks, but  when  it  came  to  the  deceptive  use  or  imita- 
tion of  identifying  personal,  geographical,  or  descrip- 
tive names,  color  of  labels,  form  and  style  of  enclosing 
packages,  configuration  or  visual  appearance  of  the 
article  itself,  the  use  of  equivalents  or  the  silent  substitu- 
tion of  one  article  for  another,  progress  was  slow,  but 
ultimately  relief  was  accorded.  When  at  last  the  courts 
found  themselves  face  to  face  with  the  question  of  stop- 
ping a  false  representation  that  one  man's  goods  were 
another's  by  the  use  of  a  name  which  with  reasonable 
accuracy  was  a  description  of  both,  the  hesitancy  mani- 
fested almost  amounted  to  immovability,  but  at  last  the 


273 


RESTRAINING     UNFAIR     TRADE 

judicial  inertia  was  overcome  and  it  was  recognized  that 
fraud  is  fraud  just  the  same,  and  it  is  the  fraud,  and 
not  the  manner  of  it,  which  calls  for  the  interposition  of 
the  court.  This  truth  once  accepted  it  necessarily  fol- 
lowed that  the  deceptive  use  of  descriptive  terms  was 
enj  oined. 

For  want  of  a  better  term  these  cases  in  this  country 
are  compendiously  designated  cases  of  unfair  competition 
or  unfair  trading  and  in  England,  passing  off.  Passing 
off  probably  more  accurately  described  the  wrong  as  at 
present  recognized,  but  unfair  trade  seems  a  preferable 
term  because  more  comprehensive.  The  wrong  has  not 
been  defined  and  should  not  be,  because  like  fraud  the 
minute  it  is  defined  it  is  limited. 

THE  TEST  AND  PROOF  OF  UNFAIR  TRADING 

It  must  not  be  assumed  that  the  progress  from  the 
state  of  mind  of  Lord  Hardwicke  in  1742  to  the  enlight- 
ened rule  applied  by  the  courts  today  was  a  steady  and 
uninterrupted  one.  Quite  the  contrary.  As  a  general 
thing  the  infringer  has  always  been  a  little  ahead  of  the 
courts.  By  the  time  the  judicial  machinery  arrives  at 
a  place  where  the  pirate  was  yesterday,  ready  to  deal 
with  him,  that  elusive  person  has  moved  forward  and  is 
still  a  little  ahead — at  a  place  the  courts  will  not  reach 
until  tomorrow — and  is  there  engaged  in  doing  something 
which  will  enable  him  to  advantage  himself  at  someone's 
else  expense  in  some  manner  hitherto  unthought  of. 

The  various  methods  briefly  outlined  of  stealing  busi- 
ness and  good  will  were  very  effectively  and  adequately 
dealt  with  by  the  courts  when  they  got  to  them,  but 
one  has  only  to  study  the  reported  cases  during  even 
the  last  twenty  years  to  be  convinced  that  as  the  judicial 
conscience  has  expanded,  the  ingenuity  of  the  infringer 
has  been  correspondingly  stimulated.  The  present  rule 
of  law,  which  has  been  crystallized  into  a  single  sentence 
— no  one  has  a  right  to  represent  his  goods  as  the  goods 
of  another — places  all  cases  on  a  common  basis  of  fact 

274 


THE     ESSENCE     OF      INFRINGEMENT 

— is  the  false  representation  being  made?  Is  the  de- 
fendant in  fact  representing  his  goods  as  those  of  a 
competitor?  Wherever  this  false  representation  is  made, 
there  is  unfair  trade.  At  this  point  the  courts  have 
caught  up  with  the  parasite  and  are  dealing  with  him 
adequately.  It  seems,  however,  now  to  be  assumed  that 
unless  the  false  representation  that  one  trader's  goods 
are  the  goods  of  another,  is  being  made,  there  can  be 
no  unfair  trade  ^that  no  trading  is  unfair  unless  it  in- 
volves the  passing  off  of  one  trader's  goods  as  and  for 
the  goods  of  another.  Unless  unfair  trade  is  to  be  given 
a  broader  meaning  than  mere  passing  off,  the  unfair 
trader  will  still1  maintain  his  lead.  At  present  he  is  dis- 
carding as  unscientific  and  old-fashioned  mere  passing 
off  and  is  indulging  in  other  methods  of  benefiting  him- 
self and  injuring  his  rivals,  frequently  not  involving  the 
element  of  deception  of  the  public  hitherto  considered 
indispensable.  Unless,  therefore,  unfair  trading  is  a 
broadly  comprehensive  term  and  the  law  still  in  the 
course  of  development  and  unless  it  develops  rapidly,  the 
business  pirate  will  keep  ahead  of  it. 

There  are  cases  scattered  through  the  law  books  which 
are  essentially  cases  of  unfair  trade  in  its  broader  sense, 
though  obscurely  digested  under  such  captions  as  con- 
tracts, torts,  injunctions,  actions  and  the  like.  With 
respect  to  contracts,  the  following  may  fairly  be  de- 
duced from  them. 

THE  RIGHT  TO  CONTRACT 

The  right  to  contract  is  a  property  right.  Business 
and  contracts  are  property.  Inducing  the  breach  of 
contract  is  actionable  and  if  repeated,  enjoinable.  It 
was  formerly  held  that  the  person  inducing  the  breach 
must  have  acted  maliciously,  that  is  to  say,  with  the 
preconceived  intent  to  injure  one  of  the  contracting 
parties — with  actual  malevolence.  Without  entering 
upon  a  discussion  of  the  effect  of  bad  motive  upon  other- 
wise lawful  acts,  it  may  safely  be  said  that  at  the  present 

275 


RESTRAINING     UNFAIR     TRADE 

time  the  words  "malice"  and  "maliciously"  are  little  more 
than  legal  billingsgate  and  mean  no  more  than  knowl- 
edge of  the  relation  and  a  disregard  of  it — foreseen  or 
even  less  than  that. 

Inducing  the  breach  of  a  valid  and  subsisting  contract 
relation  is  not  however  the  only  wrong  of  this  character 
for  which  the  law  affords  relief.  It  is  unlawful  to  inter- 
fere and  prevent  the  formation  of  contract  relations.  A 
man  has  a  right  to  enter  into  contracts  and  it  is  un- 
lawful for  another,  without  a  valid  excuse,  to  intermeddle 
and  prevent  it. 

A  trader  has  certain  other  rights  with  respect  to  his 
business.  Every  man  has  a  right  to  carry  on  his  private 
business  in  his  own  way.  He  may  deal  with  whom  he 
pleases.  He  may  refuse  to  deal  with  any  individual  or 
group  of  individuals  for  any  reason  or  for  no  reason. 
Attempts  by  outsiders  to  coerce,  control  or  interfere 
with  the  exercise  of  these  rights  are  unlawful.  The 
courts  will  not  compel  a  man  to  deal  with  one  with 
whom  he  does  not  choose  to  deal,  or  in  the  absence  of 
statutes  prohibiting  discrimination  to  sell  goods  to  one 
on  as  favorable  terms  as  they  are  sold  to  others  or  on 
any  terms  at  all,  and  this  whether  he  is  acting  with  a 
proper  motive,  with  reason  or  merely  for  caprice. 

THE  RIGHT  TO  BE  FREE  FROM  INTERFERENCE 

The  converse  of  the  proposition  is  also  true;  a  man 
having  a  right  to  deal  with  whom  he  chooses,  if  he 
choose  to  deal  with  certain  persons  who  are  willing,  it 
is  unlawful  for  another  to  interfere  and  come  between 
them  and  thus  hinder  or  prevent  the  exercise  of  the 
right.  In  a  recent  case  complainant  was  a  manufacturer 
of  wagons,  maintaining  traveling  agents  in  Washington 
who  took  a  number  of  vehicles  and  drove  through  the 
country  selling  chiefly  to  farmers.  Defendant,  an  asso- 
ciation composed  of  local  dealers,  entered  upon  a  sys- 
tematic course  of  interference  with  the  business  of  com- 
plainant by  employing  men  to  follow  each  of  its  agents, 

276 


THE     ESSENCE     OF      INFRINGEMENT 

stopping  at  the  same  hotels  and  stables,  starting  out 
when  he  started,  following  him  throughout  the  day  to 
every  prospective  customer  and  interfering  with  the  con- 
versation. They  took  with  them  no  goods  and  generally 
offered  none  in  competition,  their  sole  purpose  appar- 
ently being  to  interfere  with  and  prevent  sales  by  break- 
ing in  on  conversations,  disparaging  complainant's  goods 
and  treatment  of  its  customers  and  by  molestation  to 
drive  complainant  out  of  business.  Enjoined  as  an  un- 
lawful attempt  to  destroy  complainant's  business. 

The  doctrine  of  such  cases  is  by  no  means  novel.  In 
one  very  old  case  plaintiff  declared  that  he  was  pos- 
sessed of  a  close  called  Minott's  meadow,  a  decoy  pond, 
to  which  wild  fowl  used  to  come.  Plaintiff  had  prepared 
decoy  ducks,  nets  and  other  apparatus  and  enjoyed  the 
benefit  of  taking  them.  Defendant  knowing  this,  and 
to  quote  the  quaint  language  of  plaintiff's  declaration, 
"with  intent  to  fright  away  the  wild  fowl  and  deprive 
plaintiff  of  his  profit  did  resort  to  the  head  of  said  pond 
and  discharged  six  guns  laden  with  gunpowder  and  with 
the  noise  and  stink  of  the  gunpowder  did  they  drive 
away  the  wild  fowl  then  being  in  the  pond".  It  was 
alleged  that  defendant  did  this  on  three  separate  days. 
Not  guilty  was  pleaded.  Holt,  C.  J.,  held  an  action 
lay,  saying: 

I  am  of  opinion  that  this  action  doth  lie.  It  seems  to  be  new 
in  its  influence,  but  is  not  new  in  the  reason  or  principle  of  it.  For, 
first,  this  using  or  making  a  decoy  is  lawful.  Secondly,  this  em- 
ployment of  his  ground  to  that  use  is  profitable  to  the  plaintiff, 
as  is  the  skill  and  management  of  that  employment.  As  to  the  first, 
every  man  that  hath  a  property  may  employ  it  for  his  pleasure 
and  profit,  as  for  alluring  and  procuring  decoy  ducks  to  come  to 
his  pond.  To  learn  the  trade  of  seducing  other  ducks  to  come  there 
in  order  to  be  taken  is  not  prohibited  either  by  the  law  of  the  land 
or  the  moral  law;  but  it  is  as  lawful  to  use  art  to  seduce  them, 
to  catch  them,  and  destroy  them  for  the  use  of  mankind,  as  to  kill 
and  destroy  wild  fowl  or  tame  cattle.  Then  when  a  man  useth 
his  art  or  his  skill  to  take  them,  to  sell  and  dispose  of  for  his 
profit;  this  is  his  trade;  and  he  that  hinders  another  in  his  trade 
or  livelihood  is  liable  to  an  action  for  so  hindering  him.  *  *  * 
But  if  a  man  doth  him  damage  by  using  the  same  employment;  as 
if  Mr.  Hickeringill  had  set  up  another  decoy  on  his  own  ground 

277 


RESTRAINING     UNFAIR     TRADE 

near  the  plaintiff's,  and  that  had  spoiled  the  custom  of  the  plaintiff, 
no  action  would  lie;  because  he  had  as  much  liberty  to  make  and 
use  a  decoy  as  the  plaintiff.  This  is  like  the  case  of  11  H.  4,  47. 
One  schoolmaster  sets  up  a  new  school  to  the  damage  of  an  ancient 
school,  and  thereby  the  scholars  are  allured  from  the  old  school  to 
come  to  his  new.  (The  action  there  was  held  not  to  lie.)  But  sup- 
pose Mr.  Hickeringill  should  lie  in  the  way  with  his  guns,  and 
fright  the  boys  from  going  to  school,  and  their  parents  would  not 
let  them  go  thither;  sure  that  schoolmaster  might  have  an  action 
for  the  loss  of  his  scholars.  29  E.  3,  18.  A  man  hath  a  market 
to  which  he  hath  toll  for  horses  sold;  a  man  is  bringing  his  horse 
to  market  to  sell;  a  stranger  hinders  and  obstructs  him  from  going 
thither  to  the  market;  an  action  lies  because  it  imports  damage. 

There  are  other  similar  cases,  some  of  them  very 
curious.  In  one  decided  in  1793  plaintiffs  were  the 
owners  of  a -ship  called  the  Tarleton,  engaged  in  trade 
with  the  natives  on  the  coast  of  Africa.  Plaintiffs  also 
owned  a  small  vessel,  the  Bannister,  which  had  been 
sent  by  the  captain  of  the  Tarleton  loaded  with  proper 
articles  for  trading  to  another  part  of  the  coast.  While 
she  was  lying  off  Cameroon  for  the  purpose  of  trading 
with  the  natives  there,  a  canoe  with  some  natives  on 
board  put  off  from  the  shore  and  came  to  the  Bannister 
for  the  purpose  of  trading,  and  went  back  toward  the 
shore.  Defendant,  master  of  a  ship  called  the  Othello, 
fired  a  shot  at  the  canoe,  hitting  it  and  killing  one  of 
the  natives,  whereby  the  natives  on  that  coast  were  hin- 
dered and  deterred  from  trading  with  the  plaintiffs.  Lord 
Kenyon  said: 

This  action  is  brought  by  the  plaintiff's  to  recover  a  satisfaction 
for  a  civil  injury  which  they  have  sustained.  The  injury  complained 
of  is,  that  by  the  improper  conduct  of  the  defendant  the  natives 
were  prevented  from  trading  with  the  plaintiffs.  The  whole  of  the 
case  is  stated  on  the  record,  and  if  the  parties  desire  it,  the  opinion 
of  the  court  may  hereafter  be  taken  whether  it  will  support  an  action. 
I  am  of  opinion  it  will. 

The  plaintiffs  had  a  verdict,  and  the  parties  agreed  to 
refer  the  damages  to  arbitration. 

In  the  first  years  of  the  nineteenth  century  an  action 
was  brought  for  assault  and  false  imprisonment  under 
the  following  circumstances:  In  the  year  1809,  Co  vent 

278 


THE     ESSENCE     OF     INFRINGEMENT 

Garden  Theatre,  London,  was  rebuilt.  When  it  was 
opened  to  the  public,  the  proprietors  increased  the  price 
of  admission  and  reserved  certain  of  the  boxes  for  sub- 
scribers, much  to  the  disgust  of  the  theatre's  patrons, 
To  express  their  disapproval  of  the  new  order  of  things, 
the  audience  began  hissing  and  yelling,  springing  rattles 
and  ringing  bells,  so  that  the  noise  and  disorder  com- 
pletely drowned  the  voices  of  the  performers  on  the 
stage.  Plaintiff  in  this  action  attended  the  play  on  one 
of  these  uproarious  nights.  He  did  not  encourage  the 
disorder,  but  sat  quietly  in  his  seat.  His  only  participa- 
tion in  the  demonstration  was  to  place  in  his  hat,  at  the 
request  of  a  person  in  the  audience,  a  card  bearing  the 
letters  "O.  P."  signifying  "Old  Prices".  On  his  way 
from  the  theatre  he  was  arrested  by  a  constable  at  the 
instigation  of  the  doorkeeper  and  taken  before  a  mag- 
istrate, but  as  nothing  was  proved  against  him,  except 
that  he  bore  the  placard  in  his  hat,  he  was  discharged. 
Sir  James  Mansfield,  in  charging  the  jury,  said: 

It  appears  that  for  a  great  many  nights  there  were  riots  there  of 
such  a  nature  as  to  put  an  end  altogether  to  dramatic  representa- 
tion. I  cannot  tell  upon  what  grounds  many  people  conceive  they 
have  a  right,  at  a  theatre,  to  make  such  a  prodigious  noise  as  to 
prevent  others  from  hearing  what  is  going  forward  on  the  stage. 
Theatres  are  not  absolute  necessaries  of  life,  and  any  person  may 
stay  away  who  does  not  approve  of  the  manner  in  which  they  are 
managed.  If  the  prices  of  admission  are  unreasonable,  the  evil 
will  cure  itself.  People  will  not  go,  and  the  proprietors  will  be 
ruined,  unless  they  lower  their  demands.  But  the  proprietors  of  a 
theatre  have  a  right  to  manage  their  property  in  their  own  way, 
and  to  fix  what  prices  of  admission  they  think  most  for  their  own 
advantage.  It  is  said,  if  the  prices  asked  are  considered  too  high, 
people  have  a  right  to  express  their  disapprobation  in  the  tumultuous 
manner  they  have  adopted.  From  this  doctrine  I  must  altogether 
dissent. 

In  a  similar  case  decided  at  about  the  same  time  the 
jury  found  for  the  plaintiff. 

Plaintiff  was  an  actor  and  was  to  perform  Hamlet  at 
the  Covent  Garden  Theatre.  The  declaration  alleged  that 
for  the  purpose  of  ruining  plaintiff  and  making  it  impos- 
sible for  him  to  continue  in  his  profession,  defendant 

279 


RESTRAINING     UNFAIR     TRADE 

hired  two  hundred  persons  to  attend  the  performance 
and  "to  hoot,  hiss,  groan  and  yell  at  and  against  the 
plaintiff,  and  to  make  a  great  outcry,  uproar,  and  riot 
at  and  against  the  plaintiff  during  his  performance  of 
the  said  character  on  the  occasion  aforesaid".  Chief 
Justice  Tindal  held  that  an  action  would  lie. 

It  has  recently  been  held  in  several  cases  to  be  unlaw- 
ful to  establish  or  conduct  a  rival  business  for  the  sole 
and  malicious  purpose  of  destroying  a  competitor. 

If  the  law  has  not  yet  arrived  at  that  point,  the  next 
step  in  advance  should  be  not  only  that  a  business  man 
ought  to  be  protected  against  any  device  by  which 
the  good  will  of  his  business  or  any  part  of  it  is  being 
stolen  away  from  him,  but  that  he  is  also  entitled  to 
the  custom  which  would  naturally  come  to  him,  and  that 
he  should  be  protected  against  any  unfair  interference 
with  his  business  by  means  of  which  this  custom  is  di- 
verted or  prevented.  He  should  be  protected  against 
any  acts  by  which  his  customers  are  taken  away  from 
him  by  fraud,  actual  or  constructive,  by  force,  intimida- 
tion, threats,  by  unfair  price  inducements,  by  the  false  or 
misleading  advertisements  or  trade  descriptions  of  his 
rivals  or  by  meddlesome  persuasion,  and  further,  that  his 
good  will,  custom  and  business  and  the  things  that  he  has 
created  in  which  they  are  embodied  should  be  secured  to 
him  against  every  unfair  (though  not  necessarily  fraudu- 
lent) attack  or  appropriation  by  others  in  any  way  that 
will  diminish  their  value  to  their  original  creator. 

WHAT  THE  PUBLIC  DEMANDS  OF  BUSINESS 

The  public  conscience  has  lately  become  awakened 
and  we  hear  much  of  "unfair  trade  practices"  in  con- 
nection with  discussions  of  the  conduct,  not  only  of  what 
we  are  in  the  habit  of  calling  the  "trusts",  but  of  other 
concerns.  Things  are  now  considered  unfair  which  were 
regarded  twenty  years  ago  as  entirely  legitimate,  if  not 
praiseworthy.  To  call  a  business  man  sharp  or  shrewd 
is  nowadays  a  doubtful  compliment. 

280 


THE     ESSENCE     OF      INFRINGEMENT 

People  are  beginning  to  realize  that  business  should 
by  conducted  as  games  are  played  among  gentlemen — 
not  only  in  accordance  with  the  letter  of  the  rules  but 
with  a  proper  sense  of  sportsmanship.  The  courts  are 
more  and  more  reflecting  this  healthy  public  sentiment, 
and  are  alive  to  the  fact  that  in  business  as  in  the  ordi- 
nary affairs  of  life  there  are  things  which  while  in  viola- 
tion of  no  express  law,  decent  people  do  not  do.  Judges 
are  realizing  that  relief  in  these  cases  cannot  be  made 
to  depend  upon  principles  of  law  evolved  in  past  cen- 
turies concerning  contracts,  trade-marks,  literary  prop- 
erty and  the  like,  when  conditions  were  different,  affairs 
less  complex,  and  when  parasitic  ingenuity  was  less 
highly  developed.  As  was  said  by  the  Circuit  Court  of 
Appeals  of  the  Seventh  Circuit  when  confronted  with 
a  novel  and  ingenious  attempt  by  a  parasite  to  take 
unfair  advantage  of  a  corporation's  enterprise: 

Property,  even  as  distinguished  from  property  in  intellectual  pro- 
duction, is  not,  in  its  modern  sense,  confined  to  that  which  may  be 
touched  by  the  hand,  or  seen  by  the  eye.  *  *  *  It  is  needless  to 
say,  that  to  every  ingredient  of  property  thus  made  up — the  in- 
tangible as  well  as  the  tangible,  that  which  is  discernible  to  mind 
only,  as  well  as  that  susceptible  to  physical  touch — equity  extends 
appropriate  protection.  Otherwise  courts  of  equity  would  be  un- 
equal to  their  supposed  great  purposes;  and  every  day  as  business 
life  grows  more  complicated,  such  inadequacy  would  be  increasingly 
felt.  *  *  *  Are  we  to  fail  our  plain  duty  for  mere  lack  of  prece- 
dent? We  choose,  rather,  to  make  precedent. 


281 


A  BIBLIOGRAPHY  OF 
UNFAIR  TRADE 


TEXT  BOOKS  AND  ARTICLES: 

Allan  on  Good  Will. 

Browne   on  Trade-marks. 

Sebastian  on  Trade-marks. 

Kerly  on  Trade-marks. 

Nims,  Unfair  Business  Competition. 

Elfreth,  Patents,  Copyrights  and  Trade-marks. 

Paul   on  Trade-marks. 

Hopkins   on   Trade-marks. 

Lucien  Brun,  Marques  de  Fabrique. 

Braun,  Trade-marks   (French). 

Kohler,  Das  Recht  des  Markenschutzes,  (1884)  and 
Warenzeichenrecht  (1910). 

Illinois  Law  Review,  Vol.  Ill,  No.  9,  page  551, 
April,  1909,  (Edward  S.  Rogers,  "Comments 
on  the  Modern  Law  of  Unfair  Trade"). 
•  Michigan  Law  Review,  June,  1910,  Vol.  VIII,  No. 
8,  p.  613,  (Edward  S.  Rogers,  "The  Unwary 
Purchaser"). 

Michigan  Law  Review,  November,  1910,  Vol.  IX, 
No.  1,  p,  29,  (Edward  S.  Rogers,  "Some  His- 
torical Matter  Concerning  Trade-marks"). 

Michigan  Law  Review,  March,  1913,  Vol.  XI,  No. 
5,  p.  358,  (Edward  S.  Rogers,  "The  Ingenuity 
of  the  Inf ringer  and  the  Courts"). 

282 


Harvard  Law  Review,  December,  1913,  Vol. 
XXVII,  No.  2,  p.  139,  (Edward  S.  Rogers, 
"Predatory  Price  Cutting  as  Unfair  Trade"). 

COLLECTED  CASES  AND  DIGESTS: 

Manual  Trade-mark  Cases,  Cox. 

American  Trade-mark  Cases,  Cox. 

Austen-Cartmell's  Digest,  (English). 

American  Trade-mark  Cases,  Price  &  Steuart. 

Newton's  Digest  Trade-marks,  (Patent  Office  Rul- 
ings). 

Hesseltine,  Digest  of  Trade-mark  Law. 

Underwood's  Card  Digest  of  Trade-marks. 

"Trade-mark  Reporter,  the  current  law  of  trade- 
marks and  unfair  competition  of  the  United 
States,"  United  States  Trade-mark  Associa- 
tion, 32  Nassau  Street,  New  York  City. 

"Reports  of  Patent,  Design  and  Trade-mark  Cases," 
Volumes  1-30,  published  at  the  British  Patent 
Office,  25  Southampton  Buildings,  Chancery 
Lane,  London,  W.  C. 

Official  Gazette  of  the  United  States  Patent  Office, 
Government  Printing  Office,  Washington. 

STATUTES — UNITED  STATES  : 

United  States  Patent  Office,  "United  States  Stat- 
utes concerning  the  Registration  of  Trade- 
marks with  rules  and  forms,"  reprinted  Octo- 
ber 15,  1913,  Washington  Government  Print- 
ing Office,  1913. 

For  text  of  state  trade-mark  statutes  see  Hopkins 

on   Trade-marks,   appendix   H. 

FOREIGN  : 

For  texts  of  Foreign  Acts  and  information  con- 
cerning foreign  registration,  see: 

Greeley,  "Foreign  Patent  and  Trade-mark 
Laws". 

283 


Card  Index  of  Hazeltine,  Lake  &  Company, 
28  Southampton  Buildings,  Chancery 
Lane,  London. 

"Patents,  Trade-marks  and  Designs,"  Bran- 
don Bros.,  59  Rue  de  Provence,  Paris. 

Patent  and  Trade-mark  Review  (Period- 
ical), Wm.  Wallace  White,  305  Broad- 
way, New  York. 

"Patents  and  Trade-marks  in  Central 
South  America,"  Obligado  &  Company, 
Buenos  Aires. 

For  the  new  German  and  Danish  statutes  on  un- 
fair competition,  see: 

Hearings  before  the  Committee  on  the  Ju- 
diciary, United  States  House  of  Repre- 
sentatives, on  Trust  Legislation,  Serial 
7,  part  29,  page  1474. 

PERIODICALS  ON  TRADE-MARKS  AND  UNFAIR  COMPETITION  : 

"La  Propriete  Industrielle,"  Berne,  Switzerland. 
Bulletin  of  United  States  Trade-mark  Association, 
32  Nassau  St.,  New  York  City. 


284 


INDEX 


Advertising,  deceptive 

—  apart  from  other  frauds  218-223 
—decoy  for  substitution 

—  how  used  by  infringers  223-247 
—rule  of  law  on                                220-223 

Advertising  the  product 

—  aim  in 

—  expense,  price  of  good  will  116-119 

—  finding  point  of  contact  with  public  120 

—  identifying  element  essential  115 

—  untruthfulness  in,  bars  trade-mark 
protection  90-98 

—value  of 

—  where  to  put  emphasis  in  118-119 
Aldus,  warning  against  infringers  42 
American  Tin  Plate   Company  trade- 

mark 210 

Anheuser-Busch    Brewing  Association, 
Budweiser  Beer  label 


149 
233 


Architecture,  imitation  of 

B 

Badius,     Jodocus,     warning     against 

infringers  42 

Baker,  Walter,  &  Company,  label  163 

Baker,  Walter,  &  Company,  chocolate 

girl  label  179 

Baker,  W.  H.,  &  Company,  labels  163 

Beecham's  Pills  158 

Ben-Hur  posters  225-227 

Big  Ben  window  dressing  221 

Breck,  Samuel,  petition  for  registration  47 
Buffalo  Soap  Powder  wrapper  207 

Business,  corporate,  appraisal  of  good 

will  29-30 

Business,  non-corporate,  appraisal  of 

good  will  30 


Cases 

— Akron  cement 

— American  Lead  Company  143-144 

— American  Tin  Plate  Company    109-210 
— American  Waltham   Watch   Com- 
pany 147-148 
—Anheuser-Busch     Brewing     Asso- 
ciation 151-152 
— Baker,  Walter,  &  Company  cases 

68,  158-159,  162-165,  204,  209,223 
— Balm  of  a  Thousand  Flowers  97 

—Beats  All  Pencil  143-144 

—Ben-Hur  225-227 

— Best  &  Company  vs.  A.  S.  Best 

&  Company 

—Big  Ben  alarm  clocks  224 

— Blackwell,  Durham  Tobacco  152 


— Blue  Lick  Springs  244 

— Blue  Ribbon  Beer  70,  87-88,  205-206 
— California  Canning  Association  245 
— Carlsbad  powder  244 

— Cascaret  tablet  134,  178-182,  200 

— Champagne  vs.  Saumur  244 

—Clark's  Thread  246 

— Coca-Cola  Company  201 

— Covent  Garden  Theatre  278-280 

— early  infringement  272-273 

— Elgin  National  Watch  Company 

154-156 

— Eno,  J.  C.,  Company  256 

— Enterprise    Manufacturing    Com- 
pany 198-199 
— Fadettes  Ladies'  Orchestra          102-103 
— Fairbank,  N.  K.,  Company,  Gold 

Dust  99,  142,  193 

— Forrest,  John,  watch  101 

— Fox,  George  C.,  bread  201 

— Gage-Downs  Company,  waists  151 

— Great  Britain  accountants  247-248 

— Hamburg  cigar  98 

— Hannis  Distilling  Company  195-196 
—Hires,  Charles  E.,  root  beer  197-215 
— Hoffman  House  cigars  220 

— Holeproof  Hosiery  134,  182-183 

— Hunyadi  Janos  Water  216 

— Hutchinson,  Pierce  &  Company  209 
— Incorporated  Accountants  248 

— Irving  House  229-230 

— Jaeger's  System  Underwear  249-250 
— Key  West  cigar  245 

— Kodak  bicycle  256 

— Lee,  Henry,  cigar  label  80 

—Little  Shop  vs.  Little  Antique  Shop  231 
— Marsh  vs.  Billings  231 

— Mechanics'  Store  200,  232-233,  271 
— Milwaukee  Malting  Company  144-145 
— Minneapolis  flour  millers  153,  243-244 
— Morgan  s,  Enoch,  Sons  Com- 
pany 144-216 
— Moxie  Nerve  Food  Company  197 
— National  Biscuit  Company  132,  190-193 
— National  Cloak  &  Suit  Company 

vs.  National  Cloak  Company  234 

— Nickle  Store  231-232 

— Pabst  Brewing  Company  205-206 

— patent  license  262-263 

— Perry's  Medicated  Mexican  Balm  272 
— Pilsen  brewers  245 

— Pinet,  boots  159 

— Pollack,  Augustus,  stogie  91-93 

— Price's  Patented  Candle  Company 

219-220 

—Prince  Metallic  Paint  94-95 

—Radium  silk  107 

—Read  Brothers,  beer  210-211 

— Reddaway  vs.  Banham  168-177 

— Reddaway  vs.  Bentham  169-170 


285 


INDEX 


— Rogers'  Silverware  158,  161,  246 

—Royal  Baking  Powder  158,  160 

—Sawyer's  Bluing 

— Scriven's  Drawers  139 

— Scrope  vs.  Grosvenor  45-46 

— Singer  Manufacturing  Company      202, 

224-225,  237 

—Six  Little  Tailors  vs.  Six  Big  Tailors  231 
— Sousa  vs.  Blakely  106 

— Southern  vs.  Howe  34 

— Sterling  Remedy  Company  134, 

178-182,  200 

— Stone  Ales  157 

—Stuart's  Dyspepsia  Tablets        158,  161 
— Swandown  brand  103-106 

— Syrup  of  Figs  96-97 

— tobacco  infringement  81 

—Union  label  246 

— Upper  Assam  Tea  Company  145 

— Wemstock,  Lubic  &  Company  vs. 

Marks  282-233,  271 

—Wells  &  Richardson  Company    177-178 
— Yale     &     Towne     Manufacturing 

Company  200 

Cataract  Flouring  Mill,  Minneapolis 

Best  label  153 

Chicago  Waist,  C-D  label  149 

Childs,  George  W.,  cigar  134 

Clay,  Henry,  cigar  80 

Community  marks 

— American  law  on  243-244 

— definition  of 

— foreign  law  on  244-245 

— French  delimination  decree         244-245 

— personal  group  name  245-248 

— unfair  practices  illustrated  252-253 

Copyright  law,  does  not  protect  title        238 

Copyrights,  value  of,  in  appraising  good 

will  25 

Council     of     Nuremburg,     decree     on 

infringement  39 

D 

Dealer,  lacking  in  trade  knowledge        67-68 
Denmark,  statute  on  price  cutting  269 

Descriptions,  use  of 

— dealer's  right  to  168,  183 

— enjoining  to  prevent  fraud  in      177-178 

— law  on  deceptive 

— legal  principle  involved  in  176-177 

Draper,  William  P.,  French  Tissue  label  187 
Durer,  Albrecht,  protected  against  in- 
fringement 39 


E 


Eagle,  H.  R.,  &  Company,  Minneapolis 

Best  label  153 

Equivalents 

— deceiving  consumer  with  204-205 

— law  on  deceptive  203-205 


F 


Factory  Seal  label  193 

Farwell,  Justice,  opinion  of  trade  wit- 
nesses 186 
Federal  Bureau  of  Corporations,  stand- 
ardizing retail  prices                            260 


Form    and    appearance,    law    on    de- 
ceptive 194-195,  201-202 
Fox,  George  C.,  oval  loaf  179 
French  Garter  label,  infringed  on  Paris 

Garter  187 

G 

Garroute,  Judge 

— imitation  of  building  architecture      238 

Geographical  name 

— how  to  prove  deceptive  use  of  148 

— how  used  to  deceive  146-157 

— law  on  use  of  156 

— not  a  trade-mark  146 

— right  of  new  comer  .to  146-151,  154-157 
— right  of  non-residents  to,  denied  151-153 
— what  rights  dealer  has  to  146 

Gold  Drop  label  149 

Gold  Dust  label  149 

Good  Will 

— advertising  attacks  on  218-227 

— analysis  of  13 

— building  by  advertising  14,  116-119 
— building  by  personal  contact  14-15 

— building  by  service  14 

— competition  essential  to  24 

— conservation  of  21 

—definition  of  12 

— early  provisions  for  transfer  of  16-17 
— eliminating  confusion  in  appraisal 

of  25-26 

— factors  involved  in  appraisal  of  26 
— how  price  cutting  hurts  257-270 

— how  to  appraise  29-30 

— no  uniform  practice  in  valuing  26-29 
— policies  that  create  11-21 

— power  of  custom  on  67-58 

— professional  22-23 

— protecting  the  author's  240-241 

— protecting  the  publisher's  241-242 

— trade-mark  is  symbol  of  127-128 

—transfer  of  22-23,  100 

Gorey,  R.  J.,  &  Company,  Cascara  label  179 

H 

Hardwick,    Lord,    on    infringement    of 

trade-mark  272 

Hector,     Benedict,     warning     against 

inf  ringers  42 

Herbert,  E.,  &  Company,  trade-mark       144 
Holmes,  Justice 

— American  Waltham  Watch   Com- 
pany 147 
— Rogers'  Silverware  case  161 
Holt,  Circuit  Judge 

— right  of  non-interference  277-278 

Hood's  Sarsaparilla,  imitation  packages  134 
Hutchinson,   Pierce   &   Company,  Star 

shirt  label  179 


Identification  60 

Identifying  the  product 

— by  technical  trade-mark  129 

— the  periodical  242 

— to  develop  good  will  19-20 

Imperial    Drug    Company,    M.    &    M. 

Extract  of  Celery  label  171 


28G 


INDEX 


Infringement 

—action  for  123-138 
— approached  from  viewpoint  of  pur- 
chaser 139-140 
— doctrine  of  clean  hands  90-91 
--edict  of  Charles  IX  39 
— heraldic  45-46 
— how  to  establish  a  case  at  law  131-132 
—indirect  205 
—in  Middle  Ages  124 
— modern  relief  from  47-49 
— nature  of  139-145 
— not  distinct  from  unfair  trading  127-129 
— of  devices  144-145 
- — of  a  trade  name  141'144 
— penalties  for,  early  39 
—rule  of  law  139-141 
— viewpoint  of  the  law  66 

Iwanta  Biscuit  label  193 


Jefferson,  Thomas,  on  registration         47-48 
James,  Lord  Justice,  on  action  for  in- 
fringement 263-264 


K 


Kelsey,  Professor,  on  Pompeian  trade- 
marks 37 

Kenyon,  Lord,  on  right  of  non-inter- 
ference 278 

Kohler,  Dr.,  on  Roman  trade-marks     38,  43 


Labels,  pictures  as  69 

Labels  and  packages 

— analysis  of  185-193 

— rule  of  law  on  deceptive 

— testimony  of  trade  witnesses  on  186-187 
Langdale,    Lord,    on    infringement    of 

trade-marks  272-273 

Lone  Star  shirt  label  179 

Los  Angeles  Brewing  Company 

— Rhinegold  Beer  label  191 


M 


Malt  trade-marks  144 

Mansfield,  Sir  James,  on  right  of  non- 
interference 279 
Membership    in    community    societies, 
false  representation  of,  enjoinable 

246-248 

Merchandise  Marks  Act  253 

Miller,  Fred,  Brewing  Company,  Mil- 
waukee Budweiser  Beer  label  149 
Misdescription 

— German  and  Denmark  laws  253 

— rule  of  law  on  248-253 

Monopoly,  in  relation  to  good  will         23-26 
Morgan's,     Enoch,     Sons      Company 

label  179 

Mosso,  Angelo,  on  Egyptian  pottery 

marks  36 


Munsterberg,  Professor,   on  attraction 

of  color,  on  deception  63,  190 

N 

National  Biscuit  Company 

— Uneeda  Biscuit  label  193 

— Inner  Seal  label  193 

New    Jersey,    statute    covering  price 

cutting  269 

Nichalson,  on  custom  68 

o 

Ownership,  proving,  of  trade-mark       85-89 

P 

Paine's  Celery  Compound  134,  177-178 

Paris  Garter  label,  infringed  by  French 

Garter  187 

Parsons,  Professor,  on  signification  of 

good  will  13 

Patents 

— in  relation  to  copyrights  51 

— in  relation  to  good  will  24-25 

Personal  name 

— community  mark  theory  of         246-247 

— courts  and  deception  in  use  of     161-162, 

165-167 

— deception  by  adoption  of  158-160 

— deception  by  own  160-167 

— how  to  avoid  deception  in  use  of  160-167 
— right  to  use  of  158-167 

Phoenix    Mill    Company,    Minneapolis 

Best  label  153 

Pillsbury,  Washbum  Flour  Mills  Com- 
pany, Minneapolis  Best  label  152 

Pitney,  Vice  Chancellor,  on  protecting 

business  names  235 

Price,  affected  by  habit  58 

Price,  Bonamy  68 

Price  cutting 

— analysis  of  264-265 

— Danish  statute  on  269 

— effect  on  producer  266-268 

— effect  on  production  258-260 

— effect  on  public  259-260,  267 

— effect  on  retailers  259,  265-266 

— New  Jersey  statute  covering  269 

— plan  to  prevent  258 

— resale  of  standardized  goods  257 

— standardization  of  retail  prices   260-262 
— tripartite  druggist  plan  258 

Protection  of  business  name 

— denied  when  representation  is  false     97 
— hotel  and  theater  234-235 

— imitation  of  corporate  and  partner- 
ship names  233-234 
— rule  of  law  on  235 
— when  it  identifies  the  product  229 

Protection  of  name  under  copyright 

— author's  240-241 

— publisher's  238 

— rule  of  law  238-241 

Protecting  names  under  patent 

— after  expiration  of  patent  237 

— descriptive  name  236-237 

— generic  name  237-238 

— rule  of  law  236-237 

Purchaser,  characteristics  in  buying     66-69 


287 


INDEX 


Pure  food  laws,  and  misdescriptions         250 
Puritan  Food  Company,  chocolate  girl 

label  179 

R 

Read  Brothers,  Bull  Dog  Bottling  label  207 

Red  Cross  labels  187 

Registration,  Jefferson,  Thomas,  on      47-48 

—foreign  111-113 

— national  109 

—state  111 

Retail  prices 

— factors  involved  in  standardizing      260 
— standardization     of,     and     public 

opinion  261-262 

— theory  of  court  on  standardizing  260-261 
Richardson, E.,  &  Company,  Celebrated 

Terrier  Bottling  label  207 


Seattle    Brewing    Malting    Company, 

Rainer  Beer  label  181 

Sidgwick,  Professor,  definition  of  habit      58 

Silver  Suds  Manufacturing   Company, 

French  Tissue  labels  187 

Sterling  Remedy  Company 

— Cascarets  label  179 

— Cascarets  tablets  200 

Stuart,     F.     A.,     Stuart's     Dyspepsia 

Tablets  171 

Substitution,  causes  for  83-84 

Substitution,  by  refilling 

— chiefly  goods  in  bulk  217 

— difficulties  in  detecting  212-213 

— how  to  establish  a  case  of  214 

— indication  of  need  for  trade-mark      217 
— law  covering  214 

— proof  required    _  216 

Supreme  Court  decisions 

— American  Waltham  Watch   Com- 
pany 147-148 
— definition  of  trade-mark_ 
— maintenance  of  retail  prices         268-269 
— maintenance  of  retail  prices  262 
— Mechanics'  Store  cose  200 
— Singer  Manufacturing  case  202 
— substitution  by  refilling  216 
— transfer  of  trade-mark  44 
See  Cases  for  other  decisions 


Tindal,  Chief  Justice,  on  right  of  non- 
interference 280 

Trade  guilds,  statutes  of  Lubeck  44 

Trade-marks 

— ancient  34-38 

— courts  and  infringers  of  125-126 

— dates  of  state  laws  on  48 

— differ  from  patents  61-53 

— exception  to  transfer,  rule  of  106 

— federal  registration  of  109-111 

—finding  full  rights  to  255-256 

— foreign  registration  of  111-113 

— foreign  theory  of  ownership  111 

— foreigners'  theft  of  111-113 

— how  far  rights  extend  under  254-256 

— how  not  to  devise  one  60 

— how  to  devise  one  60-61 


— how  to  make  legally  sound  76-84 

— infringer  of,  in  Middle  Ages  124 

— infringement  of,  and  unfair  trading 

128-120 

— inseparable  from  business  itself  103-100 
— lawful  assignment  of  101-103 

— licensing  of  106-108 

— limitation  in  use  of  40-41 

— list  of  infringing  word  marks       142-143 
— medieval  39-47 

— misrepresentation  of  composition  of 

product  under  95-97 

— misrepresentation  of  value  of  pro- 
duct under  97-98 
— modern  infringer  of  125-127,  131-137 
— national  registration  of  109 
— ordinance  of  Amiens  on  40 
— ordinances  of  Strassburg  on  44 
— origin  of  33-34,  45-47 
— ownership  of  53-54,  99-101 
— publishers'  use  of  241-242 
— record  of  your  88-89 
— registration  creates  no  rights  in  109 
— right  to,  established  125 
— state  registration  of  111 
— statute  of  Parma  on  43 
— Supreme  Court's  definition  of  75 
—transfer  of  101-100 
— U.  S.  Statute  of  1905  on  43 
— what  makes  a  t.  valuable  62-63,  72 
Trade  name 

— commonplace  82-8S 

—deceptive  79-80 

— descriptive  78-79 

— how  to  find  a  good  one  62-71 

— geographical  77-78 

— personal  76-77 


U 


Unfair  competition 

— assaults  on  business  good  will  228-235 
— by  advertising 
— courts  slow  in  defining 

— deceptive  community  marks  243-253 

— deceptive  descriptions  168-183 

— deceptive  equivalents  203-205 

— deceptive  labels  and  packages  184-193 

— deceptive  ornamentation  198-199 

— deceptive  personal  names  158-167 

— deceptive  place  names  146-167 

—deceptive  structure  199-202 

—law  of  129-130 
—right  of  contract 
— right  of  non-interference 

— test  to  uncover  255-250 
— what  constitutes 

Upper  Assam  Tea  Company  trade-mark  144 
Upton,  Francis  H.,  on  law  of  trade-marks  48 

w 

Washburn-Crosby  Company,  Minne- 
apolis Best  label  159 

Wells,  Richardson  &  Company,  Paine 'a 

Celery  Compound  label  171 


Yale  &  Towne  Manufacturing  Company 

case  200 


288 


IIVERS//J 


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